Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

ANGLESEY MARINE TERMINAL BILL [Lords]

Order for Second Reading read.

To be read a Second time Tuesday next.

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)

Read a Second time and committed.

LIVERPOOL CORPORATION BILL (By Order)

Order for Second Reading read.

To be read a Second time upon Tuesday next.

WEST SUSSEX COUNTY COUNCIL BILL (By Order)

Read a Second time and committed.

Oral Answers to Questions — NATIONAL FINANCE

Value-Added Tax

Mr. Hicks: asked the Chancellor of the Exchequer if, in his examination of value added tax, he will consider the desirability of all products used in the building and timber trades being subjected to the same rate of tax; and if he will make a statement.

The Minister of State, Treasury (Mr. Terence Higgins): We are considering all aspects of value-added tax but have no statement to make at this stage.

Mr. Hicks: Would my hon. Friend note that the building and similar trades tend to be composed of a large number of small units and that any unnecessary administrative work places a disproportionate burden on their resources? Is he aware that if varying rates of V.A.T. were to be included on the same invoice, as if the present Customs and Excise classification were to operate, confusion would certainly arise?

Mr. Higgins: Following publication of the Green Paper, this was a point put to us by many associations in the building and timber trades. We shall give it careful consideration.

Mr. Jay: Can the hon. Gentleman give upon us one good reason for introducing value-added tax?

Mr. Higgins: Yes. I can tell the right hon. Gentleman a number of very good reasons, most of which I deployed in the Finance Bill debates last year

Mr. Joel Barnett: Can the hon. Gentleman confirm that the likely rate of V.A.T. will be given in this year's Budget? Does he realise that without that industry will find it impossible to plan ahead?

Mr. Higgins: We have received representations on this point, too. I must ask the hon. Gentleman to await the statement which my right hon. Friend will make on Budget day.

Mr. Spearing: asked the Chancellor of the Exchequer if he will publish illustrative tables of the effects of introducing value-added tax at various stated rates on selected items of everyday and occasional consumption now subject to no or varying rates of purchase tax.

The Chief Secretary to the Treasury (Mr. Maurice Macmillan): We have under consideration suggestions of this type.

Mr. Spearing: Since we were promised open and honest government, will the right hon. Gentleman hurry this matter up and publish these tables? Would he agree that the introduction of value-added tax means that people


with high discretionary income will have their income and purchasing power increased, whereas those with a low discretionary income will suffer a reduction? Could he confirm that fact?

Mr. Macmillan: The hon. Gentleman must await the Budget for any details. However, the hon. Gentleman's premise is wrong. At this stage it would be misleading and confusing to issue comparative tables on the basis of hypothetical V.A.T. rates and in the absence of any announced decision about the scope and coverage of the tax. It is usual at the time of changes in indirect taxation to issue such illustrative tables as the hon. Gentleman suggests, and we are considering how best to do this. My right hon. Friend the Chancellor of the Exchequer has indicated that at the time of the Budget debate he will produce details of the value-added tax in advance of the Finance Bill.

Mr. Emery: Will my right hon. Friend ensure that directly after the Budget the illustrations to which he has referred will be available for wide circulation throughout the country and to traders generally? This will need to be done on a much larger scale than is normally done on the application of some new tax, and is something in respect of which traders and the public will look to the Government. They will expect them to provide these details immediately after the Budget rather than to await publication of the Finance Bill.

Mr. Macmillan: I fully accept my hon. Friend's view that with a tax as new and as difficult as this, it is absolutely essential first of all that the traders who are to operate it should be fully informed: and, secondly, that the public affected by the tax should be fully informed as soon as possible.

Mr. Sheldon: But since the Government have repeatedly refused to make available to hon. Members discussion papers which have been widely circulated to industry and commerce in general, will the hon. Gentleman look at this matter again? Will he say why he has been unable to present these papers to hon. Members for discussion when they have been freely available to everybody else? Why should we be excluded from participation in important decisions of this kind?

Mr. Macmillan: The hon. Gentleman is not being excluded from participating in anything. The Customs and Excise Department is following its normal practice in discussing the administrative problems involved with the various trades and industries which will have to operate the tax, as far as they can be discussed without knowledge of the rates and the coverage, which my right hon. Friend will reveal in his Budget.

Liquid Petroleum Gas

Mr. Simeons: asked the Chancellor of the Exchequer if he will reconsider his intention to place a tax on gas for use as fuel for road vehicles.

Mr. Maurice Macmillan: All aspects of this matter, including in particular the effects on pollution, were fully discussed during the debate on last year's Finance Bill and I see no reason for interfering with the decision taken by the House then.

Mr. Simeons: Will my hon. Friend bear in mind that there is a risk of him chasing his own tail and that if he creates a disincentive for people to use fuels which will not contaminate the air, they will use those which do, with the result that large amounts of money will be poured out by his hon. and right hon. Friends in mopping up the atmosphere?

Mr. Macmillan: The difficulty is that a relatively small displacement from normal road vehicle fuel has a relatively large effect on revenue but not on the environment. The limited supplies of liquid petroleum gas now available are being fully used industrially where their effect in preventing pollution is as good as on the roads. The use of these fuels, as my right hon. Friend the Secretary of State for the Environment made clear, does not obviate the need for making ordinary motor fuels less polluted.

Mr. Crouch: May I draw to my hon. Friend's attention the fact that since we debated this matter last year there has been a substantial development in industry involving the use of liquid petroleum gas for reducing smoke emission in diesel engines? Is he aware that this work is only partly under way and that there is


a great deal to be done? Will he consider discussing this with his right hon. Friend the Secretary of State for the Environment?

Mr. Macmillan: Most certainly. As my hon. Friend said, this work is of necessity development work. It is kept under review not only by the Treasury but by the Department of the Environment.

Tax Offices (Correspondence)

Mr. R. C. Mitchell: asked the Chancellor of the Exchequer whether he will take steps to ensure that letters from members of the public to the various tax offices are answered promptly.

Mr. Higgins: The staff of tax offices make every endeavour to deal promptly with letters from members of the public. If the hon. Member has a particular case in mind I shall be happy to look into it.

Mr. Mitchell: Is the Minister aware that, since the reorganisation of tax offices, there has been a growing volume of complaints from the public that tax offices take a long time to answer their letters and sometimes do not answer them at all? Is he aware that, since I returned to the House in June, I have had more complaints from members of the public on this subject than I had in the whole of the last Parliament?

Mr. Higgins: Yes, I am aware of the correspondence which the hon. Gentleman has had with my hon. Friend the Financial Secretary to the Treasury. Overall, the work situation in tax districts is now somewhat better than it has been in recent times. The matter the hon. Gentleman raises is of grave concern, and we will certainly look closely at any cases which are brought to our attention.

Mr. Simon Mahon: Would it not help if the new tax offices which are envisaged were to be more rapidly completed? In my constituency a large tax office which would provide considerable employment is two years behind schedule. Will the Minister do something about getting it completed and tell me when it will be completed?

Mr. Higgins: I will certainly bring that to the attention of my hon. Friend

the Financial Secretary who, I know, will look into it.

Building Societies (Mortgage Rate)

Mr. Walter Johnson: asked the Chancellor of the Exchequer how many representations he has received on the subject of the rate of interest being charged by building societies for house mortgages.

Mr. Higgins: None, Sir, since the building societies reduced their mortgage rates on 1st January.

Mr. Johnson: Is the Minister aware that, while interest rates have been falling generally, building societies are still charging 8 per cent., sometimes more, and that the general public feel that they are being grossly exploited? Will the Government refer this matter to the Monopolies Commission or to another form of inquiry?

Mr. Higgins: The public concern which the hon. Gentleman has expressed has not been reflected in the mailbag to which I referred.

Mr. Johnson: I will show the hon. Gentleman my mail bag.

Mr. Higgins: By all means—if the hon. Gentleman cares to send the letters to me. My hon. Friend the Under-Secretary of State for Trade and Industry recently told the House that he did not consider that a reference of mortgage rates to the Monopolies Commission would be justified at present, although he would continue to keep the situation under review.

Mr. McCrindle: Does not my hon. Friend agree that the present boom in private house building is being sustained by the continuing flow of funds into building societies? As building societies have to take a balanced view between the advantages of reducing the rate of interest to existing borrowers and continuing to attract funds to help new borrowers, are not they the best judges of when to reduce interest rates?

Mr. Higgins: I entirely agree with the balanced view which my hon. Friend takes. If building societies do not pay the market rate to investors they will not attract sufficient funds to meet demands


for mortgages and will have to reduce their lending.

Road Haulage Industry (Charges)

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer if he will undertake in his Budget statement to propose the abolition of the increase in charges on the road haulage industry imposed since October, 1964.

Mr. Maurice Macmillan: I have noted my hon. Friend's suggestion.

Mr. Bruce-Gardyne: I thank my right hon. Friend for that not unexpected reply. Is he aware that the huge increases in taxation on this industry imposed by the Labour Government have done disproportionate damage to the economy of Scotland and that the reversal of these increases would give disproportionate advantage to the economy of Scotland? Does he not agree that the only explanation for the failure of the Labour Party to support representations we have made on this point is a remarkably sordid collective guilty conscience?

Mr. Macmillan: I have noted my hon. Friend's specific suggestion as well as his more general suggestion. There has been a large increase both in the tonnage carried and in the ton-mileage performed by the road haulage industry, and it is essential that resources used for transport, whether road or rail, should show a proper return.

Reserves

Mr. Parkinson: asked the Chancellor of the Exchequer what is the current level of official reserves.

Mr. Maurice Macmillan: At end-January, converted at the middle rate, £2,679 million.

Mr. Parkinson: I thank my right hon. Friend for that reply and welcome the record level of the reserves. I urge my right hon. Friend to take advantage of this record level, first, by lifting some of the restrictions on overseas investment, which are too stringent and much too long-standing, and, secondly, by lowering Bank rate, which would be a major contribution towards giving investment the fillip which we all agree it needs.

Mr. Macmillan: My hon. Friend will not expect me to comment on his second proposal. On his first proposal, these matters are under constant study and review.

Mr. Joel Barnett: As that clearly was a well-planted Question and the Minister obviously has in front of him many replies, will he tell us the cost in terms of increased employment of every £1 million increase in the reserves?

Mr. Macmillan: The hon. Gentleman is on a wrong premise. The Government have not sought increases in reserves at the expense of the domestic economy. The high level of reserves reflects the strength of the balance of payments and is an extremely good basis for the reflationary measures which my right hon. Friend has already taken.

National Savings

Mr. Hunt: asked the Chancellor of the Exchequer what has been the total growth in National Savings since June, 1970.

Mr. Higgins: The total amount invested in National Savings in June, 1970, was £8,500 million. By December, 1971, this figure had risen to £9,216 million—an increase of £716 million or almost 8½ per cent. in the 18 months.

Mr. Hunt: Do not these excellent figures reflect confidence in the integrity and ability of the Government? To maintain the momentum of this National Savings boom, will my hon. Friend ask the Chancellor of the Exchequer to consider further tax incentives to saving in the coming Budget?

Mr. Higgins: My hon. Friend's first remark is correct and is true also of the previous period of Conservative Government. This figure contrasts with the 4½ years prior to June, 1970, when National Savings increased by only £134 million. It is important as a long-term measure to do everything possible to encourage savings. On the specific point raised by my hon. Friend, I am sure he does not expect me to anticipate anything which my right hon. Friend may say in his Budget speech.

Mr. Heffer: Does not that figure prove precisely the opposite—that the growth in National Savings is because people are


becoming worried about their future, and, under a Tory Government, are putting their money into savings because they fear that they will soon be unemployed?

Mr. Higgins: I do not think that is so. As I say, higher savings provide a firm foundation for a period of sustainable economic growth and higher employment, and that is what we are determined to achieve.

Sir G. Nabarro: Without in any way being tempted to anticipate the Budget, will my hon. Friend bear in mind that the present Prime Minister when speaking from the Opposition Front Bench in 1965 promised the abolition of capital gains duty on unit trusts? As unit trusts are a formidably important source of new savings, will my hon. Friend study the Prime Minister's undertaking on that earlier occasion?

Mr. Higgins: I will certainly bear in mind the point raised by my hon. Friend, but of course this matter obviously comes within the scope of the Budget.

International Monetary Situation

Mr. Coombs: asked the Chancellor of the Exchequer if he will make a further statement on the current international monetary situation.

Mr. Maurice Macmillan: The immediate situation is satisfactory, but there is an underlying need to make progress with the reform of the international monetary system.

Mr. Coombs: Will my right hon. Friend please expand as soon as possible, I hope today, on how discussions are going on the long-term reform of the international monetary system along the lines set out in the proposals of the Chancellor of the Exchequer last September?

Mr. Macmillan: The subject is under discussion in the Executive Board of the International Monetary Fund. As my hon. Friend will understand, the substance of those discussions must remain confidential. Treasury Ministers and officials exchange views with their opposite numbers in other countries whenever opportunity offers. We cannot expect progress to be very quick on changes as fundamental as those suggested by my right hon. Friend the Chancellor of the Ex-

chequer at last September's I.M.F. meeting.

Mr. Roy Jenkins: Will the right hon. Gentleman tell us whether the difficulties relating to the dollar as an acceptable medium of exchange for I.M.F. transactions, which is a symptom of the underlying difficulty of the present world monetary system, in particular relation to our repayment of debt, have been sorted out?

Mr. Macmillan: There is a later Question on the Order Paper on this subject. I agree that it is not satisfactory that I.M.F. operations should be hampered as they are at present by dollar inconvertibility. I hope that it will soon be possible to find a way round so that we can get back to normal.

New Halfpenny

Mr. Lipton: asked the Chancellor of the Exchequer whether, in view of the growing disuse of the new halfpenny, he will now withdraw this coin from circulation.

Mr. Higgins: No, Sir: this coin, equivalent to 1·2 old pennies, has an important rôle to play in price shading. It is widely used, especially in food prices, and almost 1,150 million are in circulation.

Mr. Lipton: But with the cost of living rising at its present rate, will it be long before this wretched little coin ceases to have any value whatever, since already the banks ignore it in calculating their balances? It will not be long before this coin follows the old farthing and the old halfpenny.

Mr. Higgins: With respect to the hon. Gentleman. I think he has the necessary action the wrong way round. The fact is that this coin enables traders to shade their prices, and clearly if the coin did not exist it is likely that there would be considerable rounding up. It is an amount of considerable value when compared with the previous value of the old penny. I believe that it has a useful rôle to play.

Miss Fookes: Would my hon. Friend consider increasing the present miserly size of this coin since there are difficulties in handling it, especially for the elderly who may have arthritic finger joints?

Mr. Higgins: This matter was decided by the previous Administration. It is right to stress that it is important that there is a size/weight relationship between the various differentials. If we were to interfere with that, it would create considerable difficulties for organisations handling coins.

Miners (Income Tax Rebates)

Mr. Leslie Huckfield: asked the Chancellor of the Exchequer by what authority offices of the Inland Revenue have disclosed details of miners' income tax rebates to local offices of the Department of Social Security during the dispute in the coal industry.

Mr. Maurice Macmillan: The tax affairs of all individuals are protected by strict rules of confidentiality and the Inland Revenue does not make disclosures concerning them.

Mr. Huckfield: Is the right hon. Gentleman not aware that in the present dispute miners are most concerned that everybody seems to know about the miners' tax affairs except the miners themselves? Will he say under which rules of confidentiality offices such as the social security department know about miners' tax rebates before the miners are given any details?

Mr. Macmillan: In no circumstances should tax offices disclose to Department of Health and Social Security officials or to anyone else details of any repayments made. However, computation of rebates likely to be made to the average miner, on assumptions about their likely pay and tax and family circumstances, were made by the Inland Revenue and for illustrative purposes were passed on to the Department of Health and Social Security. I repeat that in those computations there were no details about any actual person or any actual repayment made.

Mr. Fletcher-Cooke: In that calculation is account taken of concessionary coal which, we understand, bears no tax at all?

Mr. Macmillan: The sole step the Inland Revenue took was to make a computation of the rebate that was likely to be made to an average miner on certain assumptions about likely tax, but no

detail was disclosed of any actual circumstances.

Coinage

Sir G. Nabarro: asked the Chancellor of the Exchequer whether he will now make a further statement concerning the introduction of a coin to be called a crown equal in value to 25p, and the phasing out of the old sixpence coin now 2½p.

Mr. Higgins: I cannot at this stage add anything to the answer I gave to my hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) on 21st January about an intermediate denomination between the 10p and 50p coins. The 2½p coin will remain legal tender at least until February, 1973. A decision about its future will be made in the light of experience over the two year experimental period from D-Day.—[Vol. 829, c. 300.]

Mr. Skinner: On a point of order, Mr. Speaker. I want the House to know that there are thousands of people outside, many of whom have been trampled on. The doors have been locked to many of my constituents and to the constituents of other hon. Members. I would like you, Sir, to draw the attention of the right hon. Gentleman the Leader of the House to this affair to see whether the situation can be remedied.

Sir G. Nabarro: Would my hon. Friend bear in mind that there is a good deal of public feeling that the gap is much too wide between the 10p piece and the 50p piece, especially as one tends to accumulate in one's pockets a large number of 10p pieces? Should not the Treasury endeavour to lighten that load in the interest of personal security?

Mr. Higgins: I have referred to this matter in answer to my hon. Friend the Member for Hampstead. Although my hon. Friend feels that there is some case for this suggestion, it is none the less important that the public should have an opportunity of getting used to the existing denominations. I believe the time has not yet come when we can reasonably make a decision on this point, but I have noted what my hon. Friend said.

Mr. Lipton: Will the hon. Gentleman ignore the terrible situation in the pockets


of the hon. Member for Worcestershire, South (Sir G. Nabarro)? We are not concerned with that. What we are mainly concerned with is the abolition of the halfpenny.

Mr. Higgins: I thought I had already dealt with the hon. Gentleman's point, and I feel bound to say that the whole premise of his earlier point, which does not arise on this Question, is totally false. There are as many new halfpennies in circulation as new pennies, and next year we expect demand for new halfpennies to increase by more than 180 million.

Investment

Mr. Ashley: asked the Chancellor of the Exchequer what new steps he now proposes to take to improve the rate of investment.

Mr. Maurice Macmillan: The Government have already taken considerable action to encourage investment, both directly and by stimulating demand.

Mr. Ashley: Leaving aside the Government's complacency, will the right hon. Gentleman agree that the Industrial Policy Group's statement about investment, which was highly discouraging, was both stupid and irresponsible at a time when we have a million unemployed? Can the right hon. Gentleman give the House his right hon. Friend's view of what the Government propose to do about overcoming the reluctance of British industrialists to invest at present?

Mr. Macmillan: The authors of the Industrial Policy Group report have, as the hon. Gentleman knows, expressed doubt whether this country suffers from a shortage of investment at present. The Government and the leaders of the C.B.I. do not accept that view. The level of manufacturing investment in 1971 is likely to be higher than earlier estimates suggested. The revised estimates for the third quarter show a rise of 5 per cent. over the second quarter level.
My right hon. Friend the Chancellor of the Exchequer has made clear to the House the steps that he has taken to encourage investment. As for the rest, the hon. Gentleman will not expect me to anticipate my right hon. Friend's Budget.

Sir Harmar Nicholls: It is a pleasant change to hear my right hon. Friend sug-

gest that things are getting better in investment for industry. However, that is not the general impression of those engaged in business. Will my right hon. Friend look at Questions Nos. 14 and 15 together, since it is the uncertainty about the value-added tax which plays a big part in keeping back investment?

Mr. Macmillan: I do not accept that uncertainty about the value-added tax is the cause. If it were, that would be removed very shortly. It is true, however, that uncertainty over the inflationary situation has contributed to the reluctance to invest. If hon. Members want more investment and more prosperity for the nation, the House as a whole had better help the Government to keep down the rise in wages and prices.

Mr. Taverne: Is the right hon. Gentleman aware that the Government's total mismanagement of the present fuel crisis will postpone the pick-up of the economy and that the immediate-term and short-term outlook for unemployment will be even more depressing? Will the right hon. Gentleman recognise that even more vigorous action will be required than would have been the case before the fuel crisis?

Mr. Macmillan: It is early to judge the effect of the miners' strike and how it will affect both confidence and investment. A great deal will depend upon the outcome of the Wilberforce Inquiry and when the miners return to work. If right hon. and hon. Gentlemen opposite wish to increase investment and to improve prosperity, I hope that they will bear this in mind and do what they can to encourage the end of the strike.

£ Sterling (Purchasing Power)

Mr. Carter: asked the Chancellor of the Exchequer what is the present value of the £ sterling compared to June. 1970.

Mr. Skinner: asked the Chancellor of the Exchequer what is the current real purchasing power of the sterling as compared with 18th June, 1970.

Mr. Higgins: I would refer the hon. Members to the answer my hon. Friend the Financial Secretary gave to similar Questions from the hon. Members for


Rugby (Mr. William Price), Newcastle-under-Lyme (Mr. Golding) and Manchester, Ardwick (Mr. Kaufman) on 25th January.—[Vol. 829; c. 1181.]

Mr. Carter: That was not a reply to my Question. But if the hon. Gentleman is so embarrassed about what would have been the answer, may I remind him that it would have been an admission on the part of the Government of a total failure to carry out their pledge at the General Election to cut inflation at a stroke? Is the hon. Gentleman aware, further, that the economic chaos that we see today is directly attributable to his Government's turn-about on that policy and, in particular, the introduction of measures which have fanned the flames of inflation?

Mr. Higgins: I think that it was a very clear answer and that, if the hon. Gentleman looks up the HANSARD reference, he will see that that is so. There has been a continuous month-by-month improvement in the retail price index since April, and the deceleration in the wholesale price index has been even faster. There has been a significant improvement—

Mr. Carter: What is it?

Mr. Higgins: The purchasing power of the £, taken as 100p in June, 1970, was 96½p in December, 1970, and 90½p in June, 1971. It has fallen only 2p in the last six months, compared with a fall of 6p in the preceding six months and 3½p in the corresponding period of 1970.

Mrs. Knight: Will my hon. Friend convey to his right hon. Friend the Chancellor of the Exchequer the concern of the public in general and housewives in particular that an over-generous settlement with the miners will lead to a further increase in the cost of living?

Mr. Higgins: This is another of the points to which my right hon. Friend the Chief Secretary has just referred. If the hon. Member for Birmingham, Northfield (Mr. Carter) will refer to the HANSARD reference that I have given him, he will see the answer clearly set out there.

Mr. Lamond: In the absence of up-to-date figures as of today's date, would the

hon. Gentleman care to estimate the date on which the £ will have become the 10-shilling pound which the electors were led to believe would happen only under a Labour Government?

Mr. Higgins: I return to the point that I made to the hon. Member for Northfield. The fact is that it has not changed since the last answer to which I have referred. The answer which was then given by my hon. Friend the Financial Secretary was that, on the basis of the movement of the general index of retail prices, the purchasing power of the £ fell by 3·5 per cent. between mid-June, 1970, and mid-December, 1970, and by 6 per cent. between mid-December. 1970. and mid-June, 1971. In the three months since June, the retail price index has risen by about three-quarters of 1 per cent.

Overseas Debt

Mr. Hordern: asked the Chancellor of the Exchequer if he will now give the present state of the United Kingdom's short and medium-term debts to the International Monetary Fund and other international bodies net of loans made through use of the Reciprocal Swap Facility.

Mr. Parkinson: asked the Chancellor of the Exchequer what is the total amount of short-term and medium-term official overseas debt outstanding; and how this compares with June, 1970.

Mr. Maurice Macmillan: At end-June 1970 the United Kingdom's short and medium-term official overseas debt amounted to £1,461 million.
At the end of last month it had been reduced to £415 million.

Mr. Hordern: Apart from the technical difficulties in repaying dollars which no one seems to want, is it now the case that we are quite clear of all the vast burden of short and medium-term indebtedness which the previous Administration left behind them? Is not it now the case that we are heading for the largest surplus on the balance of payments ever? Are not these the conditions for sustained and rapid economic growth, which would be assisted even more by a timely and generous cut in the Bank Rate?

Mr. Macmillan: I cannot comment on my hon. Friend's last sentence, but I agree fully with what he said in the remainder of his supplementary question. I remind the House that it is a technical difficulty of repaying the remaining £415 million of debt which is causing the hold-up.

Mr. Parkinson: In view of the reply which I received earlier about our large reserves, and in view of the small indebtedness about which we have just heard, may I take this second opportunity to urge my right hon. Friend to consider lifting or relaxing the restrictions on overseas investment?

Mr. Macmillan: My right hon. Friend the Chancellor of the Exchequer will bear in mind my hon. Friend's suggestions.

Dr. Gilbert: In view of the comments about the problems of convertibility, can the right hon. Gentleman say something about the Government's proposals to deal with the problems, and can he assure us that in no circumstances are the Government's endeavours being directed to trying to influence the American authorities to restore convertibility into gold?

Mr. Macmillan: As I said in answer to an earlier Question, the detail of the discussions taking place in the I.M.F. is confidential. But I will draw the attention of my right hon. Friend the Chancellor of the Exchequer to the points made by the hon. Gentleman, and I can assure him that the discussions are continuing.

Mr. Roy Jenkins: Is the right hon. Gentleman aware that the rate of repayment of debt in the past 18 months, which we welcome, has been just about the same as the rate of repayment in the 18 months to June, 1970, and that what has happened makes nonsense of one of the main Conservative propaganda points at the General Election that we had debts hanging round our shoulders for many years to come?
Will the right hon. Gentleman also apply himself to the point put to him by the hon. Member for Horsham (Mr. Hordern) that, with no effective debt remaining and the balance of payments being very strong, there is an overwhelm-

ing argument for using this situation to expand the economy?

Mr. Macmillan: I made it clear, in answer to an earlier question, that I regarded the current situation as a base from which to carry out a sustained expansion of the economy. Notwithstanding the right hon. Gentleman's remark, the overall debt of this country, which went up under the previous Administration, has now been wiped out under this Administration.

Development Areas (Free Trade Zones)

Mr. Tilney: asked the Chancellor of the Exchequer whether he will consider the establishment of one or two free trade zones in development areas.

Mr. Higgins: This is not a simple matter, but if specific proposals are put forward by industry we shall be prepared without commitment to examine them.

Mr. Tilney: Since Germany has five free ports and Italy six, is it not sensible for this country, as an applicant to the European Economic Community, to follow the Irish tradition and have manufacturing, as at Shannon, in one of our development areas?

Mr. Higgins: We shall be prepared, without commitment, to examine the kind of proposal which my hon. Friend suggested. The existing system for giving duty relief on imported goods and materials which are re-exported or used in making goods for export is flexible, well understood, and works well, and it involves fewer restrictions and controls than are likely to be involved in a Customs-free trade zone.

Vehicles (Revenue)

Mr. Sydney Chapman: asked the Chancellor of the Exchequer what was the total revenue derived from the vehicle excise duty, purchase tax on vehicles, and excise duty on hydrocarbon oils, respectively, in the last year for which figures are available.

Mr. Higgins: In the financial year 1970–71, motor vehicle duties yielded £421 million, purchase tax on vehicles £267 million and the hydrocarbon oil duty £1,396 million, of which £1,263 million was in respect of road fuel.

Mr. Chapman: My hon. Friend knows that £621 million was expended in the same year on the provision of new and the maintenance of existing roads. Since it is the erroneous belief of many motorists that this is all they get back from the vast sums which they pay in tax, will my hon. Friend, as a matter of urgency, consider publishing—at least before the Budget statement—the true cost of the maintenance of roads and provision of new roads by local authorities as well as by the central Government, such costs including road signs, markings, clearing and cleaning of roads, policing and traffic signals?

Mr. Higgins: I will certainly consider what my hon. Friend said. However, a more fundamental point which needs to be made is that in many ways the viewpoint which he has summarised is misconceived since expenditure on roads is governed by the amount of resources which we can afford to allocate to them in competition with other claims on the national product.

Mr. Dalyell: On hydrocarbon oils, is the Treasury considering the proposals put forward in last year's Finance Bill about favourable treatment for liquefied petroleum gas?

Mr. Higgins: The hon. Gentleman knows that we have dealt with this matter, which was raised in earlier Questions this afternoon, in debate. We are still considering the rate which should be charged. I hope that we shall make an announcement soon.

Purchase Tax

Mr. Kinnock: asked the Chancellor of the Exchequer if he will take steps to make selective cuts in purchase tax to favour goods produced in development areas.

Mr. Maurice Macmillan: I have noted the hon. Member's suggestion.

Mr. Kinnock: I hope that the right hon. Gentleman does more than that, otherwise we might be convinced that the Government's lack of sensitivity towards regional problems is matched only by their lack of ingenuity. Will the right hon. Gentleman bear in mind that there is a desperate need for extra substantial

inducement for the regions and that this suggestion could have a worthwhile effect on prices generally?

Mr. Macmillan: I am sure that my right hon. Friend will bear in mind what the hon. Gentleman said; but, as this is a Budget matter, the hon. Gentleman will not expect me to be more precise at this stage.

Tax Revenue

Mr. Ashton: asked the Chancellor of the Exchequer what additional tax revenue he expects to receive due to the current financial year having 366 days.

Mr. Higgins: The extra day is not expected to have any measureable net influence; revenue will be increased, but so, too, will expenditure.

Mr. Ashton: Is it not a fact that people who work 28 days in February get the same pay as those who work 29 days in February, especially if they are paid monthly? What is happening to this extra's day's production? Are the bosses getting it? If as the Minister of State says, the Treasury is not getting it, where is that extra day's work going in that 29-day period?

Mr. Higgins: It will depend to some extent on the day of the week on which the extra day falls. It is not possible to give a quantitative estimate of the point which the hon. Gentleman has made.

Mr. Tebbit: Does my hon. Friend know of anyone who will work either 28 or 29 days in the month of February?

Mr. Higgins: That is a point to which I must give further thought.

Oral Answers to Questions — OCEANOLOGY

Sir C. Taylor: asked the Prime Minister which Minister is responsible for oceanology.

The Prime Minister (Mr. Edward Heath): Because of the diversity of the interests involved, it would be impracticable for a single Minister to take responsibility for the whole of this subject. But there is already close co-ordination between the Ministers concerned with the different aspects of oceanology.

Sir C. Taylor: In view of the importance of both the sea and the seabed, would it not be a good idea for one Minister to co-ordinate the importance of oil, minerals, food, building materials, metals, chemicals, fresh water supplies and 101 other things so that the whole aspect of production from the sea and the seabed can be co-ordinated?

The Prime Minister: The list which my hon. Friend has given, which is by no means comprehensive, shows the difficulty of bringing all aspects of this matter under one Minister. The matter was examined by the previous Administration, and in their White Paper on Marine Science and Technology of April, 1969 they came to the conclusion that it was impracticable to have one Minister. The Select Committee on Science and Technology, which reported on this matter in July, 1969, also came to the same conclusion.

Mr. Pardoe: Is the Prime Minister aware that the return on capital invested in oceanology would be far higher than the return on capital invested in flights to the moon or in other space endeavours? Since other countries are not spending on oceanology anything like the amount they are spending on the moon—particularly America—would it not be better if we gave the lead and appointed one Minister and spent more money developing this subject?

The Prime Minister: I have given sufficient reasons for not appointing one Minister. I agree that we should attach considerable importance to work on oceanography. The Natural Environment Research Council's research programmes related to the subject are now costing about £6 million. The Ministry of Agriculture. Fisheries and Food's Fisheries Research Laboratory is also carrying out a wide range of studies on some of these matters, particularly on the conservation of fish and shellfish stocks. We are also helping in international organisations.

Sir H. Legge-Bourke: Will my right hon. Friend bear in mind that the White Paper and the Report of the Select Committee on Science and Technology, to which he referred, were not totally coincidental in their view? Some concern was expressed by the Select Committee, particularly on the development of marine

technology, and it felt that the White Paper was inadequate to meet the real needs of the nation.

The Prime Minister: I am prepared to consider that matter afresh, but I do not think that it affects the question of having one Minister to deal with all the different aspects of it. However, from the point of view of looking at marine technology, I will consult the Departments concerned.

Oral Answers to Questions — CHANCELLOR OF THE EXCHEQUER (SPEECH)

Mr. Skinner: asked the Prime Minister whether the public speech at Leeds by the Chancellor of the Exchequer on 28th January on prices and incomes represents Government policy.

Mr. Joel Barnett: asked the Prime Minister if the public speech of the Chancellor of the Exchequer at Leeds on 28th January on unemployment represents Government policy.

The Prime Minister: Yes, Sir. I would emphasise particularly my right hon. Friend's conclusion that price and pay moderation are two of the preconditions for the sustained improvement of living standards and for rising employment.

Mr. Skinner: Is the Prime Minister aware that that kind of intransigence has led to the national disaster which now faces the Government? Is the right hon. Gentleman further aware that, having marched with 20,000 miners and their wives today, I can say that whatever this prices and incomes policy may mean to the Government, as far as they are concerned, it must represent about £5 for face workers and £9 for those underground if this disaster is not to engulf him and the establishment which he represents?

The Prime Minister: In that case, it happens to be something shared by the establishment opposite as well, because price and pay moderation were two of the pre-conditions which were emphasised in every White Paper produced by the Labour Party when in Government, and particularly by the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) when he was Chancellor of the


Exchequer. Any particular matters concerned with the present dispute are for the inquiry.

Mr. Barnett: Is the right hon. Gentleman aware that the Secretary of State for Trade and Industry told us last night that the methods used to meet the present economic chaos and massive unemployment were carefully planned last November? So that we can learn the lessons from this, would the right hon. Gentleman consider publishing a White Paper to show the economic costs of this carefully laid plan by comparison with the likely cost of settling this strike before it had even started?

The Prime Minister: What my right hon. Friend said—I heard him say it—was that so far as industry was concerned, there had been criticisms that no arrangements had been made until last week for the means by which, if it were necessary, power supply would be rationed. He pointed out that there had been long consultation with industry as to how this could be done and that, in any case, it would not have been possible to send out notices to 20,000 different firms if the allegations were true.

Mr. Onslow: Would my right hon. Friend agree that this Question provides an opportunity for the Leader of the Opposition to remedy the fact that, yesterday, his Front Bench spokesmen dodged the question whether they believed that the miners should return to work pending the inquiry and that it would be in the public interest if this deficiency were now made good?

The Prime Minister: Yes, Sir. I believe that that is a fair question to put to the Leader of the Opposition. I should have hoped that he and his Front Bench spokesmen would have answered it unequivocally—[HON. MEMBERS: "Where were you?"] I was here for the opening speeches. I would have hoped that, in view of his experience in Government, when he made the same appeal himself, the right hon. Gentleman would have made an appeal on this occasion to the N.U.M.

Mr. Harold Wilson: Has the right hon. Gentleman studied what I said in Saturday on this point? [HON. MEMBERS: "Answer."] I made it clear then that there should be an immediate return to work—

Mr. Onslow: Why did not the right hon. Gentleman's Front Bench spokesmen say that?

Mr. Wilson: —on the understanding that the Prime Minister on Saturday should have intervened with both sides, got the issue settled over the weekend and saved a week. Is he aware—[HON. MEMBERS: "Yes or no?"] I have already said it—on Saturday. Is the right hon. Gentleman aware that I said on Saturday that the miners should return to work but that a prior condition was that the Prime Minister should start work first?

The Prime Minister: In his speech the right hon. Gentleman asked me to intervene to ensure that the court of inquiry was speedily convened and got on with its work. In fact, the court of inquiry had by then already been set up and was already at work. On Sunday it was at work, and announced that it was prepared to see the parties yesterday, so there was no reason for me to intervene to speed up the court of inquiry.

Oral Answers to Questions — NORTHERN IRELAND

Mr. Biggs-Davison: asked the Prime Minister what recent communications he has had with the Prime Minister of the Irish Republic concerning Northern Ireland and the Irish Republican Army.

The Prime Minister: I am in touch as and when necessary with Mr. Lynch about matters of mutual concern. The Government of the Irish Republic are very well aware of our views on the rôle they should play in controlling the I.R.A. south of the Border.

Mr. Biggs-Davison: Since the Border is the bone of contention, will the Government, while upholding the Northern Ireland Constitution, seek to take the Border out of Stormont politics and adopt my referendum Bill?

The Prime Minister: Many people are giving consideration to the question whether a referendum should be held and whether it should be held at regular intervals. But, as the question is about Mr. Lynch and the Irish Republic, I can only say that he has repeatedly said that he recognises that the unification of Ireland cannot be brought about


speedily and that it cannot be brought about against the wishes of more than one million Protestants in Northern Ireland. He has made that clear.

Mr. Duffy: Yes, but if the right hon. Gentleman is considering periodic referenda on the reunification of Ireland, as is widely reported, he must couch it and present it in the most positive terms, with a view to promoting the necessary basis for change by consent. Otherwise it will be interpreted on one side as an evasion of responsibility on his part and may meet with a barren response.

The Prime Minister: The hon. Member is correct. That is why I mentioned, in answer to my hon. Friend, that many people are considering this matter—because a number of important aspects are involved. There are some south of the Border who would interpret this as meaning that it would never be possible to bring unification about, while others, north of the Border, would consider that a referendum was not such an effective measure in dealing with this problem as a parliamentary vote. That is why I said that one has to take all these points into account.

Oral Answers to Questions — PRIME MINISTER (RESPONSIBILITIES)

Mr. Spearing: asked the Prime Minister if he will give the details of the official articles or published papers he has written on matters relating to his responsibilities since assuming office.

The Prime Minister: None, Sir.

Mr. Spearing: Would the Prime Minister recognise that that is a disappointing reply? Would he also read certain articles relating to his responsibilities? Is he not aware that, in last week's Labour Weekly, which he should have read, an article showed that, had the miners accepted the £2 offer of the Coal Board, by April, when the Government have erected their means test barriers, some of them would be taking home less pay? Would he not agree that, if the Government persist in putting up means-test barriers to people on low or medium incomes, this will inevitably mean large wage claims?

The Prime Minister: I have written no articles, as I told the hon. Gentleman. I am certainly not responsible for that which he mentions.

Rear-Admiral Morgan-Giles: Will my right hon. Friend write an article on law and order? Will he, in this article, draw attention to the curious position of the Leader of the Opposition who a moment ago said that the miners should go back to work pending a settlement, whereas five minutes ago I heard him in the Grand Committee Room assuring the miners of the fullest support in their struggle and congratulating them on the demonstration now illegally taking place in Parliament Square?

The Prime Minister: It is not for me to explain the inner contradictions of the Leader of the Opposition.

Mr. Harold Wilson: Is the Prime Minister aware that there is no contradiction? The hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles) has an accurate report of what I said in Great Westminster Hall at 3.10 p.m. We have backed the miners in this, we have backed them in this House in our votes and we shall continue to back them. What we cannot understand is the contradiction of the right hon. Gentleman himself whose only intervention in this dispute was last Friday at a Conservative meeting in Liverpool, but I asked him to intervene on Saturday and settle the dispute.

The Prime Minister: Whatever the Leader of the Opposition may or may not have said, I see that the National Executive of the Labour Party yesterday passed a resolution giving full support to the miners—[HON. MEMBERS: "Hear, hear."] I am not sure whether it was the original 35 per cent. claim or the present 25 per cent. claim to which that resolution referred. Whichever it may be, it is not possible to give full support to that claim and at the same time to pretend that one is against inflation and unemployment.

Oral Answers to Questions — PRESIDENT NIXON (DISCUSSIONS)

Mr. Dalyell: asked the Prime Minister when he next hopes to meet President Nixon; and if he will discuss with him mutual relations with the People's Republic of China.

The Prime Minister: As I indicated in my reply to the hon. Member's Question of 18th January, relations with the People's Republic of China were among the subjects discussed when I met President Nixon in Bermuda on 20th and 21st December. We have at present no plans for further meetings.—[Vol. 829, c. 150–1.]

Mr. Dalyell: Was not this morning's news of the lifting of the American embargo on trade with China entirely predictable? Why should British exporters be put at a considerable disadvantage by our policy on Taiwan?

The Prime Minister: We have been trading freely with China all through this period, when the Americans have not. Both our countries are covered by the Cocom procedure. As I understand it, there is no change in that respect, because the list is a matter of agreement with the countries concerned. As for Taiwan, we have no relations with Taiwan and I do not see why our trade with China should suffer in that respect. Of course it is true that our trade with China, like our trade with Soviet Russia, has fluctuated considerably at different periods. Over the last four years it has fluctuated between roughly £30 million and £55 million. But, at the same time, as I told the hon. Member, we are in discussion with the Government of the People's Republic about our future diplomatic relations with them.

Mr. Rankin: Would the Prime Minister say whether, during his discussions with the President of the United States, there was still hostility to China, not only to China's foreign policy but to the expansion of China in Asia?

The Prime Minister: We have had no hostility to China. We have had diplomatic relations with China since the Labour Government of 1950. Moreover, I should have thought that the world appreciated the importance of President Nixon's forthcoming visit to Peking and that it was an indication that the United States wants a dialogue with Peking. It was this assurance which President Nixon gave me.

COAL MINERS (MASS LOBBY)

The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): On a point of order, Mr. Speaker. It is right that I should report to the House on the circumstances of the mass lobby taking place, which I have specifically been to see to ensure that everything was carried out in accordance with the recent proposals of the Services Committee, and, indeed, in the best interests of all concerned.
I assure the House that every effort is being made on behalf of all those concerned to ensure that this demonstration is properly and peacefully conducted. Every effort is being made to ensure that those in very large numbers who wish to come into this House and into Committee Rooms are able to do so. I specifically made arrangements myself when there for an extra 500 people to be admitted immediately, and that has been done.
I pay a considerable tribute to the right hon. Gentleman the Opposition Chief Whip, who has taken a considerable part in ensuring that this demonstration is properly conducted and that everything is being done that should be done in accordance with the traditions of the House.
I also pay a considerable tribute to some of the stewards of the march with whom I have spoken, who are taking every precaution to make sure that their members are doing everything they can to pursue it on a peaceful basis. The large numbers create considerable problems for the police. I should also like to say how much I admire the work of the police and the authorities of the House in a very difficult situation. All concerned are conducting it in a way in which I would regard as the highest in British traditions.

Mr. Michael Foot: We appreciate the statement that the right hon. Gentleman has just made and the efforts that he has made, together with my right hon. Friend and others, to ensure that the dangerous situation that seemed to be arising half an hour ago outside the House should be properly dealt with. We are grateful to him for making the statement. Would he undertake to keep a very close watch on the situation to ensure that large numbers of miners are able to come into the House


and that they are able to exercise their democratic rights to meet their Members of Parliament and others in the House, and if by any mischance there is any hold up in this procedure, will he make a further report to the House? I am sure that he would agree that we all wish to ensure that miners coming on this lobby should have full access to their Members of Parliament in this House to be able to put their view.

Mr. Whitelaw: Further to the point of order, Mr. Speaker. The hon. Gentleman will appreciate that, within the limits of the accommodation of the House and what numbers can properly be admitted, those who can be admitted will certainly be so. How many are admitted of the large numbers inevitably ultimately depends upon how quickly those who come in then move through and go out again. This point is very much in the mind of the right hon. Gentleman the Opposition Chief Whip, and this will be done. This is very important because obviously the House cannot accommodate more than a certain number at any one time.
As for my interests in the matter, I am grateful to the hon. Gentleman. He would accept that my determination both to go there to see to it and to return and to report to the House is evidence that I wish to see that, within the reasons proper to the House, every help is given. It cannot be possible, necessarily, to accommodate in this House everyone who might want to come in at any particular time, because that clearly is not within the capacity of the buildings or the arrangements that can be made here. But, within those premises, everything is being done that can reasonably be done.

Mr. Harold Wilson: Further to that point of order, Mr. Speaker, and endorsing the tributes paid by my hon. Friend to the right hon. Gentleman and to my right hon. Friend, both for their concern in this matter and for their effective handling of it, may I suggest to the right hon. Gentleman that, should there be difficulties which are, perhaps, not immediately reported to him—although I hope they will be—if any hon. Member has a difficulty to raise, instead of the important debate today being interrupted, the matter should be taken straight to the right hon. Gentleman's office so that

he can intervene? Perhaps Mr. Speaker, if any of your successors in the Chair were notified of that it would help the smoothness of our debate and the speed with which the right hon. Gentleman would wish to deal with any situation, as I am sure he would want to do it quickly.

Mr. Speaker: I would only add, on behalf of the Chair, that I have been in touch with the situation throughout and have taken such steps as I can to ensure that the matter is handled in the best possible manner.

WHITTINGHAM HOSPITAL

The Secretary of State for Social Services (Sir Keith Joseph): With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the Report of the Committee of Inquiry into the administration of, and conditions at, Whittingham Hospital, near Preston, Lancashire. The report has been published this afternoon in Command Paper No. 4861.
Allegations of ill-treatment of patients, fraud and maladministration at Whittingham were made in confidence to my predecessor in 1969. These were followed by a special audit investigation and inquiries by the police. Shortly after the police inquiries were completed a nurse was tried and convicted of manslaughter of a patient. As soon as I was free to do so after these proceedings I set up the committee of inquiry, which made its report to me early in November. Publication of the report has been delayed while charges against two other nurses, on which both were acquitted. were before the courts.
The report is very disturbing. It is highly critical of standards of medical and nursing services in some parts of the hospital, particularly for longer-stay patients, and of the management. It also criticises the Manchester Regional Hospital Board, and to some extent my Department also. With a few qualifications, which are not however central to the main issues, I accept the conclusions and recommendations.
The report assesses Whittingham as a hospital of wide contrasts and an extreme example of a hospital which has failed


to keep up with the times. Side by side with some good modern services, it found in the long-stay wards evidence of old-fashioned methods, inadequate treatment and rehabilitation, poor buildings and insufficient medical and nursing staff. The report severely criticises the medical and nursing administration, the management structure and the way these worked; it describes the result as a hospital with day-to-day tactics but no overall strategy The committee of inquiry believes that in these conditions there have been instances of ill-treatment and large-scale pilfering by some members of the staff and the further evil of suppression of complaints about such practices when made by junior staff.
As the House knows, I have set up a Committee to review the procedures for dealing with complaints in hospitals, and I have arranged for this most distressing aspect of the Whittingham Report to be brought to its attention.
The report apportions a share of the blame for the general state of affairs at Whittingham to the regional hospital board, which, while pioneering the establishment of psychiatric units in general hospitals, did not adequately recognise the needs of elderly long-stay patients, which led to dual standards of care. I accept that my own Department as well as others may not have been sufficiently alive to this danger in earlier years. Our present policies take full account of it.
The report recommends that all members of the Whittingham Hospital Management Committee should be invited to resign and the committee reconstituted. It also recommends complete operational integration of the medical and nursing services at Whittingham with those of the psychiatric unit at Preston. Such integration is undoubtedly most desirable, but in my view it is doubtful whether it can be achieved satisfactorily without amalgamating under a single hospital management committee the hospitals at present in the Whittingham and in the Preston and Chorley groups. The board has already started local consultations on proposals for amalgamation. The chairman of the Whittingham committee resigned in December on grounds of ill-health, and four other members have resigned in the course of discussions of the proposed amalgamation. With my

endorsement the chairman of the board is inviting the remaining member to resign so that a reconstituted committee can be appointed with amalgamation with the Preston and Chorley group of hospitals in mind at an early date. The new committee will need to consider the many detailed recommendations in the report for improvements at Whittingham itself. There have already been important staff changes.
This report highlights two of the most important problems facing the hospital service today: the proper care and treatment of longer-stay and elderly patients in large isolated mental hospitals, and the proper planning of the transition from services based on such hospitals to services based on departments in general hospitals. I have asked all boards to review their services for longer-stay mentally ill patients, looking particularly at outmoded attitudes, at allocation of staff, and at management policies and organisation. Each board is also now working out and discussing with my Department plans for the restructuring of its services for the mentally ill; these will provide for a properly organised transition to services based in general hospitals, and improved standards in the old mental hospitals until they eventually close.
It would be wrong to jump to general conclusions from the indictment in this report of some parts of one hospital. There have been enormous improvements in the last 20 years in nearly all psychiatric hospitals. The great majority of staff, at Whittingham as well as elsewhere, work with patience and devotion, often in difficult and unsatisfactory conditions, which we are now making great efforts to remedy.
I have referred in this statement to the main points which arise from the report. The Command Paper includes a foreword I have written which contains similar comments and also refers in more detail to the recommendations addressed to my Department and to the regional hospital board; action on most of these has already been taken or is under way.
The House will, I am sure, be grateful, as I am, to Sir Robert Payne and the other members of the Committee for the time and effort they devoted to their inquiry and to producing this forthright and constructive report. Ever since I have been in office I have been continuing


the theme of my predecessor in concentrating on improvements in this and related fields where they are most needed. The House can be sure that the lessons of this report will not be forgotten.

Dr. Summerskill: The right hon. Gentleman is to be thanked for the forthright and clear way in which he has presented the report. In view of the extremely serious and shocking revelations in it, will he accept that the recommendations should be implemented as soon as possible? Will he bear in mind the deep concern of all hon. Members that the report is the latest in a succession of hospital scandals, following as it does the 1968 inquiry into the "Sans Everything" allegations, the 1969 Ely Hospital inquiry and last year's Farleigh Hospital inquiry?
As we are dealing with the most vulnerable in the community, who are entirely dependent on the compassion or the disciplined care of others, I would ask the right hon. Gentleman four specific questions.
First, what immediate steps will the right hon. Gentleman take to ensure that not only in Whittingham but in similar hospitals there is from now on first-class, efficient management and co-ordination between hospital management committees, regional hospital boards and medical nursing administrators?
Secondly, will the right hon. Gentleman take immediate steps to increase the inspection of all such hospitals by the General Nursing Council at more frequent intervals and encourage a more rapid turnover of staff, periodically bringing in new staff from outside, because in such hospitals the staff become as institutionalised as the patients?
Thirdly, will the Secretary of State encourage the more active rehabilitation of long-stay chronic or psycho-geriatric patients, with increased transfer to community care, and will he consider giving greater powers to his proposed community health councils in the forthcoming reorganisation of the National Health Service?
Fourthly, we note no mention in the right hon. Gentleman's statement of the Ombudsman. Will he recognise that there is public anxiety about the lack of investigation of complaints into the

National Health Service and that his Committee to investigate the rôle and setup of the Hospital Advisory Service is no substitute for a hospital Ombudsman, because such complaints need an independent procedure outside the National Health Service? Will he seriously consider the setting up of a hospital commissioner?

Sir K. Joseph: The Government treat extremely urgently the carrying out of all the recommendations in the report. It is true that there has been a series of revelations connected with the mental-illness and mental-handicap hospitals. These to some extent reflect the higher standards the community now expects, in that conditions are being revealed that used to be taken for granted. On all the hon. Lady's points except two I can give wholehearted agreement. I cannot bind the General Nursing Council, which is an independent body, but I know it will note the hon. Lady's comments. The question of a health commissioner is a separate matter. I am pledged to make a statement to the House about it as soon as possible.

Mr. Gardner: I thank my right hon. Friend for his statement, and especially for the answer he gave to my urgent question on Friday. Will he make sure that three things are done: first, that all traces of the causes of the scandals referred to in the report are removed; secondly, that the present loyal and devoted staff who are working to restore the fine reputation of the hospital are given every encouragement; thirdly, that the inquiry into the premature and unauthorised publication of the report last week is published as soon as possible?

Sir K. Joseph: I know the intense interest and concern of my hon. and learned Friend about ail these matters. I wish I could tell him there was a magic wand by which any Government could remove instantaneously all the factors that have led to the conditions in question. We shall do our best to act as quickly as possible. Certainly, the Government wish to encourage and pay tribute to the devoted work of the vast majority of the staff at Whittingham and the other similar hospitals. I will certainly let the public know as soon as I have any information about the cause of the leakage.

Mr. Mayhew: I thank the right hon. Gentleman for his statement. Does he agree that the final and proper solution to this appalling problem—this horrifying report bears out the worst that has been said against mental hospitals by their most outspoken critics—is to find alternative accommodation for the patients, to empty the hospitals and then raze them to the ground in the shortest possible time? Will he therefore work out and issue a White Paper on services for the mentally-sick as he has on services for the mentally-handicapped, setting out a timetable, budgeting and costings, so that these hospitals can be emptied and finished with, at most within 15 years from now?

Sir K. Joseph: The hon. Gentleman's compassionate concern for those who are mentally ill is well known, and I pay tribute to it. But, with the very best will in the world, many of these hospitals will have to remain for 10 or 15 years, and we must look after the morale and the working conditions of the patients and staff involved with them. We cannot magic them away. However, subject to that. I intend to carry out just the policy the hon. Gentleman adumbrates. But will the hon. Gentleman not give circulation to any idea that the conditions revealed in the report reflect the normal conditions in such hospitals? That would not be true.

Mr. Fletcher-Cooke: Is my right hon. Friend aware that he has today removed a great cloud from North Lancashire, the terror of the word Whittingham that has been over us for many years, and that we are all most grateful to him for the honest, forthright and radical way in which he has admitted the faults in this service and promised to put them right? Will he accept that we echo very much the views of the hon. Member for Halifax (Dr. Summerskilll that the announcement of an independent grievance machinery in the form of a commissioner, parliamentary or otherwise, is long overdue, and that he should announce it within the next few weeks if the good work he has done today is not to be dissipated?

Sir K. Joseph: I am grateful to my hon. and learned Friend, but the House should not deceive itself. The sad fact about many of the people in mental-ill-

ness and mental-handicap hospitals is that they cannot speak for themselves, and many have been abandoned by their families. Therefore, the adoption by the Government of health commissioner procedure would not be of use to them. The sad revelation from the report is that when the student nurses brought the scandalous conditions to the notice of the nursing administration they were suppressed by that group of nursing administrators.

Mr. Rose: I welcome the open way in which the Minister has dealt with this scandal. This is indeed a change from what often occurs in cases of this kind.
Will the right hon. Gentleman look into some of the general problems in the Manchester area which are faced by the regional hospital board because of. for example, outmoded buildings and facilities, not least in my constituency in relation to Springfield, where the staff and patients alike suffer because of these ancient buildings?
Will the right hon. Gentleman pay particular attention to the problems of inpatients at psychiatric units, in which adolescents and youngsters generally must mix with very old patients? Is he aware that the facilities for autistic children are a real problem in the North-West?

Sir K. Joseph: I appreciate that, but the Manchester Regional Hospital Board is not the only board with old premises. The Hospital Advisory Service is now starting to visit some mental hospitals in the region.

Mr. Crouch: Does my right hon. Friend recognise the need for a much clearer statement from him about the process of change as we try to take down these old psychiatric hospitals? Is he aware of the feeling among the staff in the hospital service, and especially in these hospitals, that they are forgotten? As my right hon. Friend admits, this is having a grave effect on morale. It is clear that we must spend money in the coming 10–15 years to maintain and even improve these establishments while we consider their removal, but may I ask my right hon. Friend to make the point that they are to be removed absolutely clear?

Sir K. Joseph: Certainly, and I would have thought that the hospital staff recognised the increased concern and finances that are now being made available by the Government. One of the satisfactory features of this report is the tribute that is paid to the surprisingly high morale at Whittingham.

Mr. Denis Howell: The right hon. Gentleman will appreciate that we have not yet had time to read and digest the report. However, we share the grave concern which has been expressed about the suppression of complaints from members of the junior nursing staff.
The Secretary of State is properly taking action of a severe kind against the group management committee, although it is formed of voluntary people. What action does the report recommend or does he contemplate taking against those with the day-to-day executive responsibility for that situation? Is he aware that it is not good enough to take action only against the voluntary members?
Is the right hon. Gentleman satisfied with the day-to-day and month-to-month control exercised by the regional hospital board when things were allowed to get so out of hand? Does he agree that the board's procedures require a fundamental overhaul?

Sir K. Joseph: The principal persons concerned in the nursing administration at the time of the suppression of complaints have left. The regional hospital board, like all other boards, is now much more aware than it used to be of the need for much closer monitoring of these services.

Mr. Will Griffiths: Is the Minister aware that his proposal to call for the resignation, in accordance with Sir Robert Payne's Report, of the members of the Whittingham Hospital Management Committee and its amalgamation with the Preston and Chorley Hospital Management Committee will be generally welcomed? May we have an assurance that in the amalgamated committee no members of the Preston and Chorley H.M.C., who are blameless so far as Whittingham is concerned, will be replaced by former members of the Whittingham H.M.C.?

Sir K. Joseph: I must be careful about this. After all, amalgamations between

groups of hospitals are not infrequent. Without reflection on the individual members, it is necessary in the public interest to choose the most suitable persons from among those available. I must, therefore, keep the hands of the board free in this matter while remembering the hon. Gentleman's argument.

MALTA

The Minister of State for Defence (Lord Balniel): Mr. Speaker, with permission, I should like to repeat a statement that has been made in another place by my right hon. and noble Friend the Secretary of State for Defence about the progress of negotiations for a new defence agreement with the Maltese Government The statement reads as follows:
The fourth round of talks in Rome on 7th and 8th February was attended by the Prime Minister of Malta, the Foreign Minister of Italy, the Secretary General of N.A.T.O. and myself. Dr. Luns and I confirmed the financial offer of the Alliance and made other proposals relating to our requirements for a defence agreement, with a view to bringing to a conclusion the negotiations which have been in progress since Mr. Mintoff formed a Government in June last year.
In conjunction with our N.A.T.O. partners, we have offered payments at a level of £14 million per annum over seven-and-a-half years. These payments, which would be conditional on the signing of a satisfactory defence agreement, would take effect from 1st October, 1971. In addition, the Maltese Government have been offered bilateral economic support by certain members of the Alliance totalling more than £7 million in all. We would require in return to be able to deploy our forces in Malta, for national and N.A.T.O. defence purposes, and to have satisfactory arrangements for the exclusion or restriction of forces from countries outside N.A.T.O.
During successive rounds of negotiations progress has been made towards defining the terms of an agreement. We have made clear that we would be prepared to release certain land and fixed assets required by the Maltese Government. To enable the Maltese Government to operate Luqa as a civil airport under their own arrangements at the end of a new agreement, we have offered to train and employ at British expense the necessary number of Maltese personnel.
But throughout the period of a new agreement Luqa airport as a whole would continue to be controlled by the R.A.F., who would, as now, give full consideration to the requirements of civil aviation. We have also offered to meet the full net costs of running the Malta Flight Information Region, instead of only doing so in part as at present.
If a satisfactory defence agreement can be reached, the British Government would expect


to deploy Forces in Malta at a level that would ensure a substantial contribution to Malta's economy. But I have made clear to Mr. Mintoff that the reduction of Maltese supporting personnel has not kept pace with the rundown of our Forces which began in 1967. We should in any case have had to reduce substantially the resent number of some 6, 000 civilian and uniformed employees. The reduction now required is of the order of 1,600.
To mitigate the effects of the reduction, I have shown readiness to discuss with Mr. Mintoff how the necessary reductions, over and above normal retirements and resignations, might be phased. Special terminal benefits would continue to be made available to those becoming redundant during the rundown period.
In addition, we have offered to employ 200 men at our expense, at a cost of up to £1 million, to carry out the repair of historic buildings for the Maltese Government. We have also offered to bring the take-home pay of Maltese locally-enlisted personnel serving away from Malta up to the level of the equivalent British Servicemen and to carry out an out-of-cycle pay review for all Maltese uniformed personnel.
The Secretary General and I asked the Maltese Government to indicate whether they accepted our proposals as a basis for a new agreement. A reply is awaited. We and our N.A.T.O. Allies still hope that the Maltese Government will state their readiness, on the basis I have already indicated, to conclude an agreement which would satisfy N.A.T.O. and British requirements. In that event, detailed negotiations could be resumed forthwith.
Meanwhile, the withdrawal of British Forces and equipment continues in response to the request made by the Maltese Government at the end of last year. In the absence of new developments, withdrawal will be completed before 31st March. It will accordingly he necessary shortly to issue final discharge notices to the total of about 6,000 Maltese civilian and uniformed personnel we now employ. But it remains the British Government's hope that the Maltese Government will find it possible to accept the N.A.T.O. offer, which we believe is fair.

Dr. David Owen: I am sure the whole House hopes that the friendly relations established in both peace and war between our two countries will be able to continue under the new defence agreement.
Is the Minister aware, however, that we on this side of the House condemn the clumsy and often insensitive way in which, particularly in the early part, the negotiations—[Interruption.]—were conducted? Once again the Prime Minister's obduracy and insensitivity characterised these negotiations. [Interruption.]
Hon. Gentlemen opposite must listen to criticism even if they do not like it.

Mr. Speaker: Order. I remind the hon. Gentleman that they must listen to a question. [HON. MEMBERS: "Hear hear."]

Dr. Owen: Thank you for reminding me, Mr. Speaker.
Is the Minister of State aware that my hon. Friends and I condemn the clumsy way in which these negotiations have been conducted and that we do not like the peremptoriness of the Prime Minister's initial approach to these delicate and difficult negotiations? Will the Minister of State confirm that his statement is not an ultimatum and that he remains flexible on the detail of the negotiations.
Will the right hon. Gentleman tell the House the total cost to be paid by the British Government per year under the seven-and-a-half-years of the agreement? Will he also explain what "exclusion" means? Does it cover only the Warsaw Pact countries? For example, will Libyan vessels be allowed to put into Malta? What about bunkering facilities?
In relation to the delicate and difficult question of the 1,600 redundancies, will the British Government be prepared to conduct negotiations with the Maltese trade unions as well as with the Government of Malta?
Finally, many Servicemen and their families in this country have been gravely inconvenienced because of the negotiations and I am sure that all hon. Members in the House will extend sympathy to them and hope that an early settlement can be achieved.

Lord Balniel: Certainly, it is the hope of Her Majesty's Government to continue the friendly relations which have existed, and which we believe do exist, between ourselves and the Maltese people and Government. But I most certainly cannot accept the criticism made by the hon. Gentleman about the way in which negotiations have been conducted. Under the 1964 agreement the outstanding payments would have been of the order of about £3·5 million a year to 1974. In addition, £3 million aid for dockyards would have been paid over the years 1974–75, and 1975–76. In contrast to these figures, the N.A.T.O. offer is worth £14 million a


year, and, in addition, £7 million in economic aid would be paid by other members of the N.A.T.O. Alliance under bilateral agreements. The United Kingdom contribution to the N.A.T.O. offer is £5·25 million. This, I should have thought, would generally be regarded as not clumsy negotiating but a very generous offer made for defence facilities.
The hon. Gentleman asked in particular whether we could treat with great care the very sensitive and human problem of the redundancies. My right hon. and noble Friend the Secretary of State for Defence indicated in another place today that this matter will receive our most close attention and that he will be flexible in this matter.

Mr. Russell Johnston: Without making any comment on the way in which the negotiations have been conducted, may I ask whether the Minister will agree that it is a clear fact that since what he has described as generous proposals have been made this indicates that there has been a grievous failure in the past to recognise what is obviously now admitted to be a justifiable complaint of the Maltese people and that had there been recognition earlier this whole crisis might have been averted? Secondly, may I ask him whether he can say anything at all about the main grounds of disagreement which are left, to which he briefly referred? Finally, have the Maltese Government been asked whether they could postpone their request for withdrawal of British troops pending a final decision on negotiations?

Lord Balniel: I do not accept the premise of the hon. Gentleman's question in that I do not accept that there has been any crisis in what has been a process of negotiation. I do, however, concede that the negotiations have been very prolonged and should be brought to a conclusion as soon as possible.
The hon. Gentleman asked what are the main outstanding problems. They revolve around the financial provision which I have already outlined. Mr. Mintoff and the Maltese Government have changed their stance on this position on a number of occasions. N.A.T.O. has made its offer, and Mr. Mintoff is now consulting with his colleagues, and it would be wrong for me to attempt to anticipate his decision.
The other major problem is that referred to by the hon. Gentleman, which is the employment of Maltese personnel. Several concessions have been made by the United Kingdom in the course of the negotiations. The main issues are over the 1,600 Maltese who will be surplus to our requirements, and the rate of pay of locally-enlisted personnel who are serving with the Forces in Malta. Those remain the two main outstanding problems.

Mr. Ramsden: Could my right hon. Friend say another word or two on the £1 million for the repair of historic buildings, which will be welcomed in view of their outstandingly high quality? Would this be extra to the £21 million, and would the work be done by Maltese or British artisans?

Lord Balniel: This is extra money which we are making available for the repair of historic buildings in Malta which we believe will be of assistance in developing their tourist trade. Also, it would involve the employment by us of 200 Maltese men in fulfilment of this task.

Mr. Wallace: Is the Minister aware that there are many in this House and in the country who are most concerned about the welfare and well-being of the people of Malta and the hurt done to the feelings of many individuals in the negotiations, and would he consider slowing down the withdrawal of British Forces in order that negotiations might be favourably concluded? This is a case in which we must remember the past as well as look forward to the future as far as the Maltese are concerned. Britain still owes Malta a debt, and the Government and the nation should recognise this and conduct the negotiations with extreme patience.

Lord Balniel: There is no question of any hurt feelings, and I entirely agree with the hon. Gentleman, whose interest in the well-being of Malta is well known, that the human problems are of very great importance. The position is that 6,100 Maltese will be made redundant if we withdraw compared with 1,600 if we stay. As to the timing the withdrawal, as I have explained, is being conducted at the request of the Maltese Government and if continued will be concluded by the end of March.

Mr. Sandys: Leaving aside the financial aspect of the negotiations, can my right hon. Friend tell the House whether there is basically agreement already between the two sides with regard to the military facilities which are being asked for and also on the question of the denial of facilities to other countries such as the Soviet Union? Is that more or less agreed, and is the financial question the only one outstanding at present?

Lord Balniel: I am afraid I cannot go as far as I should like in answering what my right hon. Friend suggests. A proposal has been put forward by Her Majesty's Government on behalf of N.A.T.O. It covers various factors, military and financial, and until we receive a reply from the Maltese Government I am afraid I cannot anticipate which parts are acceptable to the Maltese Government.

OWNER OCCUPATION (HELP FOR PRIVATE LANDLORDS' TENANTS TO PURCHASE)

4.10 p.m.

Mr. Frank Allaun: I beg to move,
That leave be given to bring in a Bill to give tenants of private property owners the right to purchase their dwellings at a reasonable price before the properties are taken out of their present rent control; to encourage local authorities to offer low-deposit or no-deposit mortgages at low interest rates to sitting tenants wishing to buy their homes from their landlords; and to permit local authorities to buy such dwellings at the same price if the tenant declines the opportunity to purchase.
This owner-occupation Bill has two aims, first, to protect private landlords' tenants from the severe rent rises which are about to be imposed on them and secondly to permit them instead to become owner-occupiers by purchasing their homes from their landlords at a reasonable price, I intend to mention first what tenants' prospects are today and secondly how this Bill would work. Unlike most Ten Minute Rule Bills, this Bill has already been drafted and printed, as I have a copy with me. I attempted to introduce such a Bill 12 months ago. Since then the need for it has, regrettably, very greatly increased, thanks to the Government's higher rents Bill.
The private tenants of this country have not yet realised what is in store for them. They are in for the heaviest caning in housing history, even worse than that due to The council tenants. I am talking about 1·3 million families whose rents are still controlled and would remain controlled if it were not for the Housing Finance Bill. This number is the Government's own estimate, and it means approximately 4 million men, women and children who would be affected by the proposals I am now making.
The Government's intention is to remove from their existing rent control all those dwellings at present controlled by the Rent Act, 1968. Their rents will then go through the rent fixing machinery and when this occurs rent increases on average will be 2·6 times the present rent. We know this because that is the figure for tenants who have lost rent control so far. For example, a controlled rent of £3 a week plus rates will go up on


average to £7·80 per week plus rates. I could, of course, quote far more serious cases. I had one recently where the increase was five-fold.
As a result of all this, some property companies will have their profits increased by millions of pounds a year. The Freshwater property group, for instance, has made a fortune of more than £9 million out of the Rent Acts, but that is nothing to what we are going to see. The real bonanza is about to begin.
The Labour Government made some serious mistakes in the Housing Act, 1969, but what the Conservative Government are doing is far worse. They propose to end control of all houses, including those without a bathroom, hot water and inside water closet, and those which are so unsound structurally as to be unworthy of having these things introduced. Even tenants of the worst slum housing are going to lose their present rent control, unless they have already been scheduled for slum clearance, and the Government know very well that vast numbers of slums are still awaiting scheduling for clearance. So the Government do not even have the excuse that the higher rents are to induce landlords to install bathrooms.
I want to pay tribute to my hon. Friend the Member for Erith and Cray-ford (Mr. Wellbeloved). He has thought a great deal and for a long time about this problem. Much of the idea and the formula of the Bill came from his brain. I will explain how the Measure would work.
At the point when the house or flat is about to be taken out of rent control, the owner would be required to offer it for sale to the sitting tenant at a reasonable price. If the tenant could not or did not wish to purchase, the local authority would have a similar option at the same price. If, however, the landlord did not wish to take the house out of control and did not intend to raise rent in this way, then he would not he required to offer it for sale.
The question will naturally be asked—what is a reasonable price? The formula is stated in Clause 2 and it should be clear that, as things are today, if rents of houses are sharply increased, as they will be, the price of those houses will also rise steeply. The intention of the Bill, therefore, is to give the land-

lord more than he would get if the house were sold today with controlled rent and a sitting tenant, but less than he would be able to charge following decontrol.
A tenant paying a controlled rent of £1·79 plus rates would be living in a house worth £1,400—this has been worked out by professional experts—on this basis of 15 times the net annual controlled rent. On the open market, without a sitting tenant the house would, it has been estimated, be worth £3,600. Thus, under my formula the selling price to the tenant would be £2,133. Some landlords complain that they wish that they could be free of the burden of their properties. Here is a way they can do it and obtain a fair return. They could then invest the sum realised in more lucrative undertakings.
My second main motive for proposing the Bill is that I have long advocated, along with some other hon. Members, the improvement of old houses by the installation of baths, hot water systems and inside water closets. There are generous grants available to property owners to improve their houses. While owner-occupiers have sensibly taken advantage of them, most private landlords have not.
I received yesterday a Written Answer from the Under-Secretary of State for the Environment to a Question on this matter. It showed in simple terms that for each house improved by landlords, four have been improved by owner-occupiers, local authorities and housing associations. The Bill would therefore greatly increase the number of houses being improved.
Not only would improvements be accelerated, but so also would much-needed repairs. Go down any back street and even from the outside one can tell which house is owner-occupied and which is landlord-owned. One can tell from the way the outside is kept, from the repainting, from the state of the window frames or the new doors and windows which have been put in. Owner-occupiers are keener on maintaining their houses in good repair.
Many landlords say that they cannot afford to do the repairs and improvements and that they cannot afford to pay even their half of the cost, the other half coming from the Government. Very


well—if that is so, let the tenant or councils buy them out and do the improvements themselves. Hon. Members opposite profess to be the upholders of the little man, the owner-occupier, and that my hon. Friends are his enemy. This is utterly untrue but if hon. Members opposite claim to be the friends of owner-occupation, let them show it by supporting the Bill.
Briefly, the advantages deriving from my proposals are, first, that it would protect tenants from the savage rent increases which will otherwise be inflicted; secondly, that it would encourage the improvement of great numbers of old but structurally sound houses; and, thirdly, it would be widely and immensely popular.
I suggest that hon. Members opposite will not vote against the Bill, which is aimed at helping owner-occupiers, because that would create a bad impression for them. Instead, I think the Government will try to kill the Bill elsewhere by failing to provide time for it to proceed.

Question put and agreed to.

Bill ordered to be brought in by Mr. Frank Allaun, Mr. James Wellbeloved, Mr. Julius Silverman, Mr. Reginald Freeson, Mr. Arthur Blenkinsop, Mr. Jack Dunnett, Mr. Hugh Jenkins, Mr. George Cunningham, Mr. Joe Ashton, Mr. Stallard, Mr. Norman Atkinson, and Mr. David Stoddart.

OWNER-OCCUPATION (HELP FOR PRIVATE LANDLORDS' TENANTS TO PURCHASE)

Bill to give tenants of private property owners the right to purchase their dwellings at a reasonable price before the properties are taken out of their present rent control; to encourage local authorities to offer low-deposit or no-deposit mortgages at low interest rates to sitting tenants wishing to buy their homes from their landlords; and to permit local authorities to buy such dwellings at the same price if the tenant declines the opportunity to purchase, presented accordingly and read the First time; to be read a Second Time upon Friday, 21st April, and to be printed. [Bill 84.]

Orders of the Day — EUROPEAN COMMUNITIES BILL

Order for Second Reading read.

4.20 p.m.

The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon): The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon) rose—

Mr. J. Enoch Powell: On a point of order, Mr. Speaker. I wish to raise with you a point of order of which I have given you previous notice. It is, I believe, a point of substantial, if not of constitutional, importance, but I shall try to put it to you and to the House as briefly as I possibly can, and I apologise to my right hon. and learned Friend for standing for a few moments between him and his defence of his Bill.
This Bill presents the difficulty that it contains a number of major proposals which impose a burden, a charge, upon the subject. There is, for example, the whole range of the Community tariffs and the consequential provisions. There are the levies under the common agricultural policy. There are the amounts which are raised for the use of the Sugar Board. In addition, there are the provisions which authorise the receipt by Ministers and the payment into the Consolidated Fund of sums which have not been raised in taxation.
All these are matters upon which the House cannot enter unless it has already passed a Ways and Means Resolution appropriate to them respectively. The Government have recognised this is tabling a Ways and Means Resolution. I happen to believe—and perhaps there will later be an opportunity to argue—that that Resolution is in itself defective. But the point that I wish to put to you, Mr. Speaker, is that these provisions which require Ways and Means Resolutions are not incidental, nor subsidiary, nor anciliary. They are the absolute essence of the Bill and the whole Bill, and the accession to the treaties would be quite impossible without them. It would, for example, not be thinkable that we could join the European Economic Community without participating in the Common Agricultural


Policy and in the Common Tariff of the Community. That being so, I submit to you that this is of its nature a Bill which requires to be founded upon Ways and Means Resolutions and that it is contrary to the practice of this House to enter upon this Bill until the necessary Ways and Means Resolutions have previously been passed.
There are two further points which I would briefly ask your permission to make. The first is that, of course, a Bill founded upon Ways and Means Resolutions does not exclude money provisions which would not in themselves require such a Resolution. That would be the case in regard to this Bill, but that fact does not alter the necessity in a Bill of which the essence is that it lays charges upon the people of being founded upon Ways and Means Resolutions.
The second and final point is this. It is part of the rules of the House, of the practice of the House, that a Ways and Means Resolution is required wherever this House delegates the power of taxation. There is admittedly an exception to this rule, and that will be found set out in "Erskine May". It is where this House delegates the power of taxation to an external authority, such as, in former days, a colony. I submit that there is no analogy between that precedent of the House in former times enabling a colony to impose taxation for the purposes of that colony and what is happening in the case of this Bill, which is an unprecedented delegation—indeed, the word "delegation" is too slight; it is a surrender—of the taxing power of this House over the people of this country to an authority outside this country.
A fortiori, therefore, it appears that this is a Bill, if any Bill is, which needs to be in accordance with our practice and ought to be founded upon previous Ways and Means Resolutions. I submit to you, therefore, that it cannot be entered upon on Second Reading without such Resolutions being passed.

Mr. Michael Foot: Further to that point of order, Mr. Speaker. Some of us have been examining this legislation with some care, and some of us have reached the conclusion, although we have had a mountain of

documents to deal with, that one of the apparently unique features of the Bill is the form of the Money Resolution and the form of the Ways and Means Resolution. Some of us, therefore, have sought, as may appear from the Order Paper, to deal with some of these questions, certainly the question which deals with part of the Money Resolution, by putting down an Amendment of a far-reaching character, which in itself is something of a novelty.
However, Mr. Speaker, I submit further to the point of order raised by the right hon. Member for Wolverhampton, South-West (Mr. Powell) that in many respects, although I have not had the time to consider the proposition which he has made so deeply as maybe you have done, he has made a most formidable case to the House. Therefore, in supporting the submission which he has made to you, Mr. Speaker, may I ask whether it is the case that the procedures which will be followed for seeking an opportunity to introduce this legislation into the House will be precisely those which are laid down by other forms of legislation and that, therefore, consideration should be given to the point which the right hon. Gentleman has made? Presumably, if that point were to be accepted, it would be necessary that the House should postpone consideration of the Second Reading of the Bill.
If that is not possible—because we understand that that would be a procedure which had not normally been followed, at any rate in the House—and if discussion on Second Reading were to be proceeded with today—would it still be in order for you to rule, Mr. Speaker, on the question whether the Ways and Means Resolutions are required, as the right hon. Gentleman suggested they should be required, before we have the Second Reading? Would it be in order for them to be laid—if, in fact, they were laid—before the House votes on the Second Reading of the Bill?
Certainly we from this side of the House ask that the most serious consideration should be given to these matters, which go to the root of the claims which this House has to exercise its control over the ways in which money is raised and over the way in which money is voted by this House of Commons.

Sir Harry Legge-Bourke: Further to that point of order, Mr. Speaker. I was not, of course, aware of what my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) was going to say in putting his point of order. If I understood him aright, he suggested that because under the proposed Bill we were involving charges being made upon the British people by an authority outside the United Kingdom, this obliged us to consider the Ways and Means Resolution before we went on to the Bill.
I wonder whether, Mr. Speaker, through you I might ask for a clarification of my right hon. Friend's point and whether he makes any distinction between such charges which would be levied by an authority of which the United Kingdom is a member, as indeed the United Kingdom would be under this Bill, and, on the other hand, an authority of which the United Kingdom would not be a member, which does not in this case apply to this Bill?

Mr. Speaker: I am obliged to the right hon. Member for Wolverhampton, South-West (Mr. Powell) for having given me ample and full notice of his intention to raise this point because it has enabled me to take counsel with those who advise me upon, and are expert in, these matters, who, in fact, have already considered them; it has also enabled me to examine the precedents. I am not ruling in any way today upon the Ways and Means Resolution or the Money Resolution, which will have to be dealt with later, or on any amendment to them. I am simply ruling on the submission of the right hon. Gentleman.
My Ruling is that the purpose of the Bill as stated in the Explanatory Memorandum is to make the legislative changes which will enable the United Kingdom to comply with the obligations entailed by membership of the Communities. Taxation is not its main purpose, and, therefore, I rule that this is a Bill which does not need to be founded on a Ways and Means Resolution.

Mr. Powell: Further to that point of order, Mr. Speaker. I am grateful to you for the consideration which you have given to the points that I have put to you. I have no intention of endeavouring to carry on the argument—indeed, it would

be improper—except to say that this is the first time, but I apprehend it will be by no means the last, in the course of the proceedings on this Bill when you and the House will find themselves faced with unprecedented questions, with propositions to which there is no previous parallel in parliamentary history. I hope that in that light you will do as your predecessors have done and not hesitate to make precedents in an unprecedented situation.

Mr. Speaker: I will certainly bear in mind what the right hon. Gentleman has said.

Mr. Michael Foot: Further to that point of order, Mr. Speaker. So that we may know exactly what is the Ruling that you have made, could you tell us whether in the examination of the precedents you have quoted there have been no comparable cases in which taxing has played a part similar to the part it plays within this Bill when there has been no Ways and Means Resolution laid beforehand? Are you saying there has been no Bill in which taxation has played a no larger part than in this Bill when the House has insisted that the Ways and Means Resolution should be presented first? If that were your Ruling we would wish to consider further whether there were such precedents. If we were able to submit such precedents to you, would it be open to you to reconsider the matter again because, as the right hon. Member for Wolverhampton, South-West (Mr. Powell) has said, although precedents are to be set my first question was whether we are to abide by the rules of the House previously had for considering these matters? We hope that those rules will be accepted until they are changed by order of the House.

Mr. Speaker: My duty upon receiving notice from the right hon. Gentleman of his point of order was to take advice and consider the precedents. I do not think it is necessary for me to state to the House all the arguments which were considered. All I can say is that I spent a considerable time carefully considering the arguments for and against the precedents. I have ruled, and I am afraid that my Ruling must stand.

Mr. Rippon: I beg to move, That the Bill be now read a Second time.
I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Bill, has consented to place Her interest and prerogative, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
I would like to begin by putting the Bill in its proper context representing as it does another stage in the series of parliamentary processes from 1967 onwards leading towards the accession of the United Kingdom to the European Communities.
The Bill arises from the Treaty of Accession which was signed on 22nd January and which—as the text of the treaty indicates—stems from the application of the United Kingdom; that is, the application made by the last Administration in accordance with the decision of the House on 10th May, 1967.
On 28th October last year the House approved the decision of principle to join the Communities on the basis of the arrangements negotiated, and on 20th January this year the House approved the procedure to be followed for signature of the treaty and its implementation. I then explained that the signature of the treaty was to be followed by the Government's proposals for legislation.
This Bill therefore is consequential on the provisions of the treaty and is a necessary preliminary to its subsequent ratification and coming into operation. This debate accordingly takes place against the background of the previous debates and decisions of the House about the principle of membership, the terms of accession and the procedure to be followed.
My duty today is to explain the Bill, its structure, the principles on which it has been drafted and the effect of its provisions. I think I can satisfy the House that these should occasion no surprise. The nature of the legislation that would be required was stated quite clearly and succinctly both by the right hon. Gentleman, now Leader of the Opposition, in the House, and the noble Lord, Lord Gardiner, in another place, on 8th May, 1967, before Parliament approved the making of our application. It would, of course, have been an application in bad faith if we did not accept subject to the terms negotiated, that we

would accept the consequential legislation that would have to be adopted.
The position was elaborated in Command 3301: "Legal and Constitutional Implications of United Kingdom Membership of the European Communities" presented to Parliament in May, 1967.
As the then Prime Minister, now Leader of the Opposition, explained:
Accession to the Treaties would involve the passing of United Kingdom legislation. This would be an exercise, of course, of Parliamentary sovereignty, and it is important to realise that Community law, existing and future, would derive its force as law in this country from that legislation passed by Parliament.
The right hon. Gentleman went on to explain that restraints of this kind on our legislative freedom are by no means unprecedented. We had accepted them for example, in accepting the Charter of the United Nations, the North Atlantic Treaty, in our membership of the General Agreement on Tariffs and Trade and again in E.F.T.A. We needed therefore
… to keep this aspect of membership in a due sense of proportion.
The right hon. Gentleman further pointed out that:
It is important to realise that Community law is mainly concerned with industrial and commercial activities, with corporate bodies rather than private individuals. By far the greater part of our domestic law would remain unchanged after entry."—[OFFICIAL REPORT, 8th May, 1967; Vol. 746, c. 1088–9.]
The House as a whole may therefore be reassured that there is no question of this Bill making a thousand years of British law subservient to the Code Napoléon.
It is because the main effect of Community law on our existing law is in the realms of commerce, agriculture, customs, restrictive practices and the like that the legislation is much more concise than perhaps any of us originally envisaged. I do not propose to go over again the ground covered in the debate on 20th January on the constitutional proprieties. I then carefully explained that the consequential legislation would be concerned to make the changes in our domestic law needed to comply with our obligations under the treaty.
There is no necessary correlation between the length and detailed wording of a treaty and the length and detailed wording of the consequential legislation.


Some treaties call for no change in our domestic law. In other treaties, as in this case, each provision has to be scrutinised to see what change in die law is needed, if any.
The object of the legislation is, therefore, to make changes which need to be made in our domestic law in order to comply with obligations deriving from membership of the Communities, and also to exercise the rights of membership.
The provisions setting out these obligations and rights are contained in the treaties and in the secondary instruments of the Communities. They have effect in two quite different ways, and the difference between them is fundamental to the structure and contents of the Bill.
First, there are the provisions which are to take direct effect in member States, the "directly applicable provisions". Secondly, there are "non-direct" provisions where the obligation rests on the member State to take the necessary action for implementation. I shall deal first with the concept of direct applicability, then with Parliament's rôle in respect of future provisions, and, finally, with the relationship of directly applicable provisions to our Statute Law.
The concept of direct applicability has been a fundamental feature of the Community treaties from the start, for a very simple reason. A common market depends on the elimination of trade barriers and of distortions of free and equal competition. This necessarily requires rules made centrally and operating in identical terms throughout the area of the market to secure fairness and consistency.
Directly applicable provisions are to be found both in the treaties themselves and in the regulations of the Communities, particularly in the implementation of the common agricultural policy. The essence of these provisions is that they apply as law within member States without further action on the part of the States themselves. Of themselves, they confer rights and impose obligations to which the national courts have to give effect.
Clause 2(1), of the Bill therefore embodies in our law this system of directly-applicable Community provisions. In describing its effect, I cannot do better than quote from paragraph 22 of the

White Paper of May, 1967, Cmnd. 3301, which says:
It would be necessary to pass legislation giving the force of law to those provisions of the Treaties and Community instruments which are intended to take direct internal effect within the Member States … The legislation would have to cover provisions in force when we join and those coming into force subsequently as a result of instruments issued by the Community institutions.
Lord Gardiner, speaking as Lord Chancellor in the last Administration, almost drafted the terms of the necessary provisions when he said:
This legislation"—
that is the pre-accession Bill—
would include an enactment applying as law in the United Kingdom so much of the provisions of the Treaties and of the instruments made under them as then had direct internal effect as law within the Member States and providing that future instruments similarly took effect as law here."—[OFFICIAL REPORT, House of Lords, 8th May, 1967: Vol. 282, c. 1202.]
This is precisely what Clause 2(1) does. There is, or ought to be, nothing unexpected in it. All who have accepted the principle of Community membership, as the great majority of hon. Members have, irrespective of their views on the terms negotiated, have accepted the need for this provision from the outset of the making of the application. The right hon. Gentleman the Leader of the Opposition, as I have already indicated, has never been in any doubt about it.
When the Labour Government applied for membership, the then Foreign Secretary stated on their behalf that they would seek satisfaction on particular issues, which he listed—the same issues as were the subject of our negotiations in the last 18 months—but that
subject to this, Her Majesty's Government accept without reserve all the aims and objectives of the three Treaties and will implement them.
This was stated in paragraph 19 of Cmnd. 3345.
Against that background we have to consider a situation in which there are altogether about 1,500 Community instruments published in the consolidated English edition on 13th January which will apply when we join. There are 1,500 and not 2,500 as some people have suggested. That is because in the documents there is a good deal of cross-referencing. About 1,200 of these are


E.E.C. regulations or E.C.S.C. decisions, which will be directly applicable in this country. The great majority of these 1,200 instruments—that is the exact number the Leader of the Opposition suggested would apply when he spoke in the House on 24th February, 1970, and told us not to be too concerned with the minutiae—actually about 1,000, are agricultural, part and parcel of the common agricultural policy dealing with the detailed operation of the intervention system, the price of rice, and so on. The rest principally affect trade and industry, for example, Customs matters and restrictive trade practices, and also transport. Some concern only the terms of service of community officers and employees and have no practical impact on our law.
Those directly applicable instruments will have effect subject to the changes and transitional arrangements which have been negotiated for their application to this country.
In addition there are special arrangements set out in the treaty; for example, the protocols on sugar and New Zealand dairy products will be given effect by Community regulations which will be directly applicable.
A number of regulations containing directly applicable provisions call for domestic legislation to supplement them and make them workable, and there are provision of this kind in Part II and Schedule 4 of the Bill, to which I shall turn in a moment—for example, the Agricultural Intervention Board.
Also, where necessary, the Bill repeals or amends existing statute law covering areas in which Community regimes will operate, for example, the repeal of parts of the Import Duties Act. The care that we have taken on this will be apparent from the repeals in Schedule 3 which affect provisions in 29 Acts totalling about 80 pages of the Statute Book. That is dealing with what is happening already, which we knew we should have to face at the end of successful negotiation.
From now on we shall of course play a full part in the formulation of future directly applicable Community instruments—as of Community instruments which do not have direct effect but require member States to implement them in their own ways.
Before a Community instrument is made, the consultative processes are thorough, lengthy and largely open. In addition to the full consultations which take place with member Governments through the system of management committees, publicity is given to all proposals of any significance so that those interested may know of them when they are still only proposals. The Economic and Social Committee and the European Parliament on which the United Kingdom will be represented have the right of consultation on all important proposals with powers to suggest amendments and changes which are then taken into account. Ultimately, as we know, the final responsibility for all measures rests between the Commission and the Council of Ministers.
A United Kingdom Minister will sit on the Council where it is recognised that decisions are not taken which may conflict with the vital national interests of a member State. Where there are conflicting interests to reconcile, the period between initial formulation of a draft proposal by the Commission and its eventual adoption by the Council may be long, stretching even in many cases to years. Formal publicity for draft instruments to be made by the Council is normally secured by their publication in the Official Journal. The Community procedures flow from the provisions of the original treaties, which have been accepted from the outset by successive Governments.
The Government are deeply concerned that Parliament, as well as United Kingdom Ministers, should play its full part when future Community policies are being formulated, and in particular that Parliament should be informed about and have an opportunity to consider at the formative stage those Community instruments which, when made by the Council, will be binding in this country.
Her Majesty's Ministers will at all times be responsible to Parliament for the action they take within the Community machine and the House will be able to bring its influence to bear by all the traditional parliamentary procedures, such as Questions, Adjournment debates and Supply Days. No Government would proceed on a matter of major policy in the Council unless they knew that they had the approval of the House.

Mr. William Baxter: On the question of the role of Parliament, if when the Minister reports back and a debate takes place, the decision of Parliament is against the decision of the Common Market Communities, how would we resolve that situation?

Mr. Rippon: That would be in breach of the treaty. When the Government come to Parliament with proposals they will have to carry them through the House. But in addition to the traditional procedures there is a need, in the Government's view, for the House to have special arrangements under which it would be apprised of draft regulations and directives before they go to the Council of Ministers for decision.

Mr. John Biffen: Mr. John Biffen (Oswestry) rose—

Mr. Rippon: I will give way in a moment. It is important that I conclude this part of my speech. This part is new and much of what I have already said is well known and has been said for four or five years. I would like to develop this point first. As I was saying, in addition to the traditional procedures the Government believe that there is a need for the House to have special arrangements, under which it would be apprised of draft regulations and directives before they go to the Council of Ministers for decision. These arrangements should cover the instruments which will be directly applicable and the non-direct instruments.
In order that the details might be worked out in a way which meets the interests of Parliament as a whole, we propose that an ad hoc committee of both Houses of Parliament should be set up forthwith to consider what would be the most suitable method of ensuring adequate parliamentary scrutiny of these draft regulations and directives. Discussions about the establishment of the committee will start immediately through the usual channels.

Mr. John P. Mackintosh: Why does not the right hon. and learned Gentleman consider putting this matter before the Select Committee on Procedure, which considered taking up this matter at the beginning and postponed it until events had taken their course? This is a matter which

the Committee had in mind as falling within its ambit.

Mr. Rippon: I agree with the hon. Gentleman. The proposed committee I have been dealing with will be concerned with the arrangements needed at the stage when a Community instrument is in draft. The arrangements which should be made for parliamentary scrutiny and control of any subsequent subordinate legislation in this country will come within the review of delegated legislation which is at present being conducted by the Joint Select Committee under the chairmanship of Lord Brooke. I hope that by the combination of those procedures we can devise arrangements which will be satisfactory to the House as a whole and in the interests of all of us.

Mr. Peter Shore: Since this matter is of such importance to the House, does not the right hon. and learned Gentleman recognise that this should have been proposed some time ago. Now that it has been proposed, is it not sensible that we should have the report of that ad hoc committee before we proceed any further with the Bill?

Mr. Rippon: With great respect to the right hon. Gentleman, that is a ridiculous suggestion. We have proceeded with this matter since 1967 stage by stage in an orderly way and there will be plenty of time in the course of the proceedings for the committee to consider this matter. We have interim arrangements with the Community up to the date of our full entry into the Community on 1st January. 1973. Thereafter these procedures will have to apply.

Sir Elwyn Jones: Is it not the case that there is provision in the ratification laws in Germany and Holland for supervision of this kind of machinery by the Parliaments of those countries to be made a statutory duty? Why is it that those provisions are not contained in the Bill?

Mr. Rippon: There is a great deal of difference between the parliamentary arrangements of all the various countries. It is not always appreciated by right hon. and hon. Members opposite how different are the arrangements which Parliaments retain within the Community to


conduct their own affairs. Although the procedures of other Parliaments are of interest, they are not directly applicable to us.

Mr. Douglas Jay: Would the special arrangements announced by the right hon. and learned Gentleman apply to Community instruments destined to go not merely before the Council but before the Commission? Do they apply in both cases?

Mr. Rippon: The committee could consider the matter widely, but I have suggested that the procedure should enable Parliament to be able to consider in the most appropriate way any decision or directive, whether directly applicable or non-directly applicable, which might affect this country. I think this takes it as wide as the right hon. Gentleman would wish.

Mr. Jay: Surely the right hon. and learned Gentleman must have considered this matter. Therefore, will he answer my question?

Mr. Rippon: I do not want to prejudge what the ad hoc committee may say about particular matters. What I have proposed is an ad hoc committee to consider arrangements which would ensure satisfactory consideration by the House of matters in draft as proposals before binding decisions can be taken by the Commission or the Council of Ministers.

Sir Harmar Nicholls: This is an important matter and will affect the views of many of us. If the ad hoc committee can work on the lines my right hon. and learned Friend has in mind, it is not a fact that the Minister would have the power to use the veto on an instrument as distinct from making an expression of policy? In other words, would there be a Ministerial power of veto or merely a discussion with no power at the end of it?

Mr. Rippon: If it is a matter regarding the price of rice, it might not be fundamental and it might be difficult to insist that it was vital to the national interest. But assuming that a question arose on which there had been strong feelings in this House, prima facie it would be a matter in the national interest and a British Minister would have power to insist in the Council of

Ministers that it was a matter of major national importance which required a unanimous decision and that he could not be part of that unanimous decision.
Before I leave the directly applicable Community provisions, I should like to mention one further feature of this concept. In order to ensure impartial administration and interpretation, it is inherent in the concept that in the last resort a single authority should determine questions about the interpretation and validity of the provisions. This is a function of the European Court, in respect of Community provisions, whether directly applicable or not.
Clause 3 subsection (1) provides for the acceptance of the jurisprudence of the European Court. As the 1967 White Paper (Cmnd. 3301) recognises, the directly applicable provisions of the Community are designed to take precedence over the domestic law of member States, in the sense that they prevail in cases of conflict.
By accepting the directly applicable law in Clause 2(1) and accepting the jurisprudence of the European Court in Clause 3(1) the Bill provides the necessary precedence. In relation to statute law, this means that the directly applicable provisions ought to prevail over future Acts of Parliament in so far as they might be inconsistent with them. In practice, this means that—again quoting the Leader of the Opposition—
It would be implicit in our acceptance of the Treaties that the United Kingdom would, in future, refrain from enacting legisation inconsistent with Community law."—[OFFICIAL REPORT, 8th May, 1967; Vol. 746, c. 1089.]
Clause 2(4) accordingly provides that present and future enactments shall be construed and have effect subject to Clause 2.
I do not want to pretend that this process of Community law-making involves no constitutional innovation whatever. [Interruption.] It does, but only to the extent clearly set out in the 1967 White Paper "Legal and Constitutional Implications of United Kingdom Membership of the European Communities".
Of course nothing in this Bill abridges the ultimate sovereignty of Parliament. As Lord Gardiner said in another place when he was Lord Chancellor,
The United Kingdom legislation would be an exercise of Parliamentary sovereignty


and Community law existing and future would derive its force as law in this country from it. The Community law so applied would override our national law so far as it was inconsistent with it. Under the British constitutional doctrine of Parliamentary sovereignty no Parliament can preclude its successors from changing the law."—[OFFICIAL REPORT, House of Lords, 8th May, 1967; Vol. 282; c. 1202.]
As Lord Gardiner said, it is unlikely that Parliament in these circumstances would wish to proceed with matters inconsistent with treaty obligations.
I now turn to the implementation of those treaty provisions and Community instruments which do not have direct applicability and therefore require action by member States. I shall first explain why certain categories do not require legislation in this Bill, secondly how the Bill deals with other provisions and finally the need for the powers in Clause 2(2) to make subordinate legislation.
I include in this category the domestic law which I mentioned earlier as sometimes being needed to supplement a directly applicable provision in order to make it operate in the manner most suitable for us; for example, to provide the machinery to conduct support-buying under the common agricultural policy. In the area of non-direct provisions, the Bill can deal expressly only with existing Community provisions, and not all of those require a change in our law; for example, the directives on capital movements can be implemented by action under the Exchange Control Act, 1947.
Secondly, some Community provisions, particularly in the treaties, call for no change in domestic law at all because they operate purely at the international level; for example, the provisions about the composition of Community institutions.
Thirdly some obligations can be met by using existing powers to make subordinate legislation which would be laid before Parliament in the ordinary course; for example, the provisions in the treaty dealing with fishing rights will be given effect by statutory instrument under existing legislation. It will be necessary to make an order under the Disabled Persons (Employment) Act, 1944, to extend the scope of that Act to nationals of member States in this country. Some 15 or so instruments will be needed this year in this category.
Fourthly there is the special case of value added tax which is to be embodied in separate provisions in the forthcoming Finance Bill.
Fifthly there are the Community requirements, for which we have negotiated delays so that they will not operate until sometime after accession.
Express legislation on this sort of provision at this stage is not necessary or perhaps desirable, because in some cases the Community policy might change before the end of our transitional period or there might be changes in our related domestic arrangements which called for a wider approach. I include in this category the implementation of Community regulations about the age of road transport goods drivers, where the Community regulations are not intended to operate for domestic journeys until 1976, and we should need to fit these changes in with the issuing of drivers' licences for life which would itself require domestic legislation.
For the remaining obligations, the Bill has made the necessary provisions. In Part I, Clause 2(3), will be found the financial provisions. Under these provisions the contributions to the Community budget and all expenditure arising from the treaties or the Bill will be met. Subsection (3) distinguishes the payments required to meet our Community obligations by making these a direct charge on the Consolidated Fund, thereby recognising the special nature of the commitment to make these payments. My hon. Friend the Minister of State, Treasury, will have more to say about that if he catches Mr. Speaker's eye later tonight.
The other provisions to implement obligations are contained in Part II of the Bill and in Schedules 3 and 4, and the Bill has followed normal practice in the nature of the provisions expressly laid before the House.
Clause 9, for example, deals with the changes required in company law in order to conform with an existing Community directive, and incidentally some of these changes are in line with the recommendations of the Jenkins Committee; for example, the provisions for ultra vires contracts and pre-incorporation contracts. Following the practice of company law legislation, all the necessary details, which are numerous although sometimes minor, are included in the Clause.
Schedule 4 contains a number of amendments to existing statutory codes, chiefly of a regulatory character in agriculture or horticulture; for example, concerned with the control of potato wart disease or the grading of fruit and vegetables. In these cases the Bill follows existing practice in the matters left to subordinate legislation; for example, in the Food and Drugs Act.
In general the Bill seeks to meet Community obligations by modifying or extending an existing regulatory code, rather than by laying down a separate set of provisions. In this way, those affected by the obligations will find that they are working within the framework of a familiar statutory code, containing the enforcement machinery and other ancillary provisions to which they are accustomed.
We anticipate that some 25 instruments will be made in 1972 under powers conferred or amended by Part II and Schedule 4; for example, to permit deferred payment of import duties, which might be quite popular.
Some people have thought it somewhat incongruous that a Bill of this importance should contain express and detailed provisions about the letterheads used by business firms, but the Government have thought it right to deal expressly and comprehensively in the Bill with the matters requiring legislation at or shortly after accession and involving specific amendments of existing Acts of Parliament. That is the principle on which Part II and Schedules 3 and 4 have been constructed.
Finally, there remains a miscellany of minor matters which are not included in the Bill but for which some legal provision is needed by accession or shortly afterwards. The provisions are generally in new fields for legislation and regulate such minor and, I hope, uncontroversial matters as textile appellations and the markings on wood in the rough. These matters are appropriate for subordinate legislation. It is necessary to take a general power in order to deal with them, as the theme which unites them is that they are needed in order to implement Community obligations or to exercise the rights of membership.
A general power to make subordinate legislation for these purposes is contained in Clause 2(2) in terms of the obligations

and rights under the treaties as defined in Clause 1. This was contemplated by the 1967 White Paper on legal and constitutional implications which referred to
delegated legislation issued under Parliamentary authority which could cover future as well as present Community instruments.
I fully appreciate the concern of the House at any new general power to make subordinate legislation, but I should like to reassure hon. Members about the prospect. On the basis of existing Community instruments, we foresee a need for not more than four instruments under Clause 2(2) in 1972 and about another 12 in 1973. This compares with an annual number of about 1,000 general Statutory Instruments on all matters laid before Parliament.
As for the future, our obligations will result in a continuing need to change the law to comply with non-direct provisions, and to supplement directly applicable provisions, and it is not possible in advance to specify the subjects which will have to be covered. In particular, Article 100 of the E.E.C. Treaty contains a general power for the Council to issue directives for the approximation of laws directly affecting the establishment or functioning of the Common Market. My earlier examples of instruments about wood in the rough and textile appellations come from directives under this Article.
There will be other obligations to be met of varying degrees of importance. The 13 years' backlog of Community instruments which the Bill deals with expressly will be matched by a continuing need to respond to non-direct provisions and, just as we are taking the existing obligations and are dealing with them in the various ways open to us—administrative action, the use of existing powers, separate legislation, express provisions and subordinate legislation under the Bill—so these different approaches will be used to meet future obligations.
As I have said, the Bill deals comprehensively with changes in the law needed now which require amendment by Act of Parliament. In future it will be possible to make many changes or to anticipate them in the ordinary programme of departmental legislation, for the same reasons that the Government decided that provisions now in Part II


of the Bill ought to be dealt with there expressly rather than Clause 2(2).

Sir Elwyn Jones: On subordinate legislation, can the right hon. and learned Gentleman explain Clause 2(4), which I confess that I and other lawyers whom I have consulted find totally incomprehensible? Is it a rule of construction, or is it a piece of substantive law and, if so, what is its effect?

Mr. Rippon: I think that is more a Committee point, is it not? If the right hon. and learned Gentleman looks at it carefully he will see that Clause 2(4) provides:
The provision that may be made under subsection (2) above includes, subject to Schedule 2 to this Act, any such provision (of any such extent) as might be made by Act of Parliament"—
then there is a break—
and any enactment passed or to be passed, other than one contained in this Part of this Act, shall be construed and have effect subject to the foregoing provisions of this section; but"—
this is important—
except as may be provided by any Act passed after this Act, Schedule 2 shall have effect in connection with the powers conferred by this and the following sections of this Act to make Orders in Council and regulations.
This reinforces the view that Community law takes precedence under Clause 2(1). I think that that is clear enough.

Mr. Powell: Still on that subsection, which raises a matter of principle, may I ask my right hon. and learned Friend to refer to the words,
except as may be provided by any Act passed after this Act"?
Why is there any doubt that has to be removed by those words that Parliament can subsequently alter what it has already passed?

Mr. Rippon: I will deal with that particular point in a moment. We have to make some provision of that kind. That may be a point more readily gone into in Committee.
The Government hope that Part II and Schedules 3 and 4 will commend themselves to the House on the basis which 1 have set out and as an earnest of their intention that the use of Clause 2(2) will continue to be confined to appropriate

cases. But the volume and miscellaneous character of Community provisions make it necessary to use the general power in Clause 2(2) for a variety of minor matters. Because of the complexity of the possibilities of the future we have had to provide in Clause 2(4) that instruments under Clause 2 may make any provision which might be made by Act of Parliament and that they can therefore amend statutory provisions.

Mr. Shore: Gobbledygook.

Mr. Rippon: It is necessary to provide under Clause 2(4) that instruments under Clause 2 may make any provision which might be made by Act of Parliament and that they can therefore amend statutory provisions. This arises because of the need to make perhaps excessive provision for matters which may arise in future which require that kind of action. What I am trying to say is that, as an earnest of the way in which we think any Government would approach these matters, we have put in express statutory provisions for major amendments now required, and we have strictly limited the use of Clause 2(2) by the overriding restrictions in Schedule 2.
For instance, paragraph 1 of Schedule 2 specifically prohibits the use of Clause 2(2), which would include Clause 2(4), to impose or increase taxation, to legislate retrospectively, to delegate Clause 2(2) powers any further, or to create an offence carrying substantial penalties. In addition, there is the parliamentary procedure prescribed in paragraph 2(2) of Schedule 2.

Mr. Michael Foot: Will the right hon. and learned Gentleman tell us whether this part, which he has elaborated partly in response to the question by his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), was covered in the White Paper of 1967, to which he has made such frequent reference? In which paragraph was this matter spelt out?

Mr. Rippon: I cannot say in which paragraph it was spelt out, but the White Paper dealt with the whole general problem of how to deal with existing and future laws. I appreciate that this is a complex piece of drafting. It has had to be put in for the reasons which I have given. It is impossible to anticipate exactly what requirements we will


agree in future, what may be the exact form of regulation or directive, and in what way Parliament will wish to deal with it. Therefore, it may be appropriate on some occasion to use that power, in effect, to amend an Act of Parliament.
I am saying that, as an earnest of the Government's intentions, we have taken care to bring before the House the major matters which require amendment in an Act of Parliament. We have also carefully limited the circumstances in which in any event the powers contained in Clause 2(2) could be used. I do not know that I can go any further now. If the hon. Gentleman reads what I have said, he will realise that it is perfectly clear. As I conceive it, the power afforded by Clause 2(4) would be used only in exceptional circumstances and subject to the other overriding restrictions in Schedule 2, plus the fact that in an Act of Parliament we have dealt with all the major matters.

Mr. Albert Booth: In order to help the House, will the right hon. and learned Gentleman tell us whether what he has just explained regarding the effect of Clause 2(2) and (4) means that if the Bill becomes an Act delegated legislation may be used to amend primary legislation? If so, why is there no provision in the Bill whereby this delegated legislation, which will amend primary legislation, is not subject to amendment and debate, as is other primary legislation?

Mr. Rippon: We are dealing with the future. In certain circumstances, subject to the provisions of the Schedule, Clause 2(4) expressly limits the power to deal with these matters in the four instances which I have set out. In addition, we have the parliamentary procedure prescribed in paragraph 2(2) of Schedule 2.
As to the use here of the affirmative or negative procedure, the Bill is drafted to ensure flexibility, pending the report of the Joint Committee of both Houses which is at present considering the whole question of the procedures and practices by which the control of Parliament over delegated legislation is exercised and how they might be improved.

Sir Elwyn Jones: Does the use of the word "flexibility" mean that it is left

to the discretion of the Minister whether the subordinate legislation is to be dealt with by the affirmative or the negative procedure, or might it be required to be laid and therefore merely brought to the attention of the House?

Mr. Rippon: The flexibility in the Bill, as drafted, is so that we may have the opportunity to consider the matter in connection with the report of the Joint Committee of both Houses which is at present considering the whole question of the procedures and practices by which the control of Parliament over delegated legislation is exercised and how they might be improved. I appreciate that we shall have to go in some detail, which is not perhaps wholly appropriate on Second Reading, into how these matters should operate. I have tried to explain as clearly as I can the extent to which we have had to make provision in the Bill for unforeseen future circumstances. I have no doubt that the Joint Committee will look specifically at the arrangements for the scrutiny of subordinate legislation arising from our obligations as members of the Communities.
In describing the structure and contents of the Bill I have necessarily been concerned primarily with Community obligations and with continuing obligations, because it is obligations which require a change in the law. But in ex-planning the nature of these obligations and the way that the Bill deals with them I have throughout been conscious that we are shouldering these obligations as a consequence of membership in the interests of the security and prosperity of our people.
I hope that when discussing the Bill, particularly at this stage, we shall not forget that its ultimate purpose is to enable us to play our proper part in the construction of a united Europe as a full member of the European Communities. We know that there are many issues which genuinely divide this House, but most of us know in our hearts that the principle and purpose of the Bill is not one of them.

5.19 p.m.

Mr. Peter Shore: I hope that the Chancellor of the Duchy of Lancaster will realise that he has addressed that last shaft to the wrong


target. If I may begin with what he has said, it was very odd that he should leave his very few remarks about the ultimate purpose of the whole thing right to the end of his speech, when, of course, it should provide—as it certainly will in my case—at least some introduction to remarks about the Bill and the treaties that it seeks to enact.
Second, the right hon. and learned Gentleman went out of his way to be as disarming as he knows how to be. Perhaps in his efforts to be disarming he was at times disingenuous, but he also managed to reveal to us, by the very proposal that there should now be set up a new ad hoc Joint Select Committee, how little thought the Government have given to the serious matters which are under discussion here. I say this not from the position that I take on these matters, because I took a very different position about the merits and desirability of entering the Community, but the House owes it to itself, its traditions and its history to make the most careful and rigorous examination of what is involved in a close relationship with the European Communities and the institutions that they have set up.
It is a great pity that this matter has not been opened up before. It is not good enough to say that there was a White Paper in 1967. Yes, there was, and, of course, that possibility of negotiation was aborted in the autumn of that year, and the issue did not reappear on the political scene until the beginning of 1970. But the right hon. and learned Gentleman and his colleagues have now had over 18 months of very serious, in their case obviously most devoted, effort to enter the Common Market, yet they have only now begun seriously to consider this most important of all the issues which in the end are involved—the effect upon the Parliament and democracy of this country.
Very big issues are indeed involved. I do not think that the Minister should have left right until the end of his speech some mention at least of the fact that what we are talking about is a Bill which will so greatly change many of the matters which affect the lives of people in this country and the prospects for our nation. It will certainly affect the prosperity of the nation. It will affect our living

standards, our chances of employment, as well as the future of great industries and many regions of this country. It will also affect, as we have just heard, the democracy of the country, the extent to which we continue to rule ourselves, and our freedom to use the State power for those purposes that we think right.
Last, and by no means least—I am speaking, as one inevitably must on a Bill of this kind, in broad terms—it will affect our relationships with other countries, in particular whether we should forge a new and special relationship—that is what it is: a community—with the neighbouring countries of Western Europe, rather than maintain the relationships and associations in the Commonwealth, E.F.T.A. and elsewhere which we have enjoyed for so long and which we enjoy today.
These are all matters, very big matters, with which we have to deal in considering this Bill and the vast amount of subordinate matter which lies beneath it. The Minister said that the Bill was concise. Of course it is, because so much of what it will do is no part of the Bill.
There is nothing concise about those volumes with which on previous occasions hon. Members have staggered into the Chamber. The Community has produced 43 volumes of regulations and law over the past 12 years. Also, there is nothing concise about the treaties which the Communities have themselves entered into with one another and with other agencies and which we were privileged to see just a week ago.
Therefore, I have to begin by trying to clear the mind of the House on what we are discussing. First, the Bill is about accession not just to the Treaty of Rome, the Treaty of Paris, the Euratom Treaty—the major founding treaties of the Communities. Nor, of course, are we concerned with accession simply to the treaties which are listed in Schedule 1. What we are acceding to is that very large number of additional treaties to which I have referred.
I hope that that is the complete number. Perhaps the right hon. and learned Gentleman can help me on this. I believe that we are acceding to the 10 volumes of additional treaties and sub-treaties which were published last week, along with the original listed treaties. That point is at least established.
The extent, the manner, the timetable, of our accession to these treaties is, of course, set out in the two volumes of the Treaty of Accession. Here, among other things, will be found the terms which the right hon. and learned Gentleman and his Government have negotiated. These matters, which the Government would wish us not to see or speak of, are to be found there—buried in a kind of shallow grave of protocols and annexes, but for all that, one can discover them there.
Part of our task in this debate and others will be to disinter these bodies and bring them before the gaze of the House. I will not say much now about what is there, but I should draw attention to at least one or two matters on which I may invite the Minister's comment—and if not his, that of his right hon. Friends.
First, the House will be aware that there has been a crucial change in the wording of the New Zealand Protocol which is attached to the Treaty of Accession, a change of wording which, according to Mr. Marshall—he used these words in the New Zealand House of Commons—would have been a breach of faith or a betrayal if we had used them. But we have, and what we want to know is what happened, and why.

Mr. Rippon: The right hon. Member for Battersea, North (Mr. Jay) raised this matter some time ago in the House. I explained to him that there was a misapprehension about this. There is no breach of faith of the sort that Mr. Marshall feared. That would have arisen if the Community had attempted to reinsert in the protocol the provision of unanimity on the principle of continuity. They have not tried to do that. The only question which arises is that it is made clear in the protocol that voting would be unanimous on the form of the continuing arrangements, as I explained to the House on 24th June.

Mr. Shore: I will come in a moment to the further point of how the alleged veto works. We will rest for the moment on that point.
Then, there is the Commonwealth Sugar Agreement. What happened, amid all these declarations, unilateral and multilateral, among all the protocols and annexes which litter these documents,

to the Lancaster House communiqué, which was the one serious statement addressed by this Government to the Commonwealth sugar producers which gave them some assurance for the future other than the rather nebulous aura à coeur" which is what the Community itself was prepared verbally to offer? I hope that, at some stage, we shall have the answer to that.
Among these matters, some things are missing. There is no mention in the treaties of the very large contribution which this country will have to make in the form of its "membership fee". The only mention of sums of money is in the Bill itself, in the Financial Memorandum, where, of course, the figures stop discreetly at the net £200 million in 1977. The most serious matters of all, in a sense—they are very serious—the assessment and the judgment about how all this would affect our future prosperity, are not mentioned. Fortunately for the Government, they do not have to mention them either in a treaty or, indeed, in a Bill of this kind. But the House must be aware that these effects will be very serious.
What inevitably will follow from the new systems of taxation which are being proposed and what will happen as a result of the very large and additional burdens on our balance of payments is that we shall endanger the possibilities of our continuing growth and prosperity in the years ahead. It will also have very retrograde effects upon the distribution of income in this country, particularly as it affects people with small incomes or below average earnings.
There is serious and genuine concern. Heavens!—there should be, with one million unemployed today and with the British economy, in comparison with the economies of the Six, having shown a considerable difficulty in achieving a satisfactory rate of growth now over a number of years. There is real worry that in relation to this large and more dynamic market in Western Europe Britain could become as Northrn Ireland has been to the United Kingdom. But there is this very important difference: whereas we today recycle very large sums of money towards Ulster and towards our other development areas in order to attempt to offset the very serious effects of the compulsive pull of stronger parts of our country, the South-East and the Midlands


—it was the Midlands, perhaps I should say—and in order to counteract these things we pump large sums of money into the weaker areas. But in relation to the Common Market, what is being proposed is the very opposite. It is that we who are in relation to the Six, I regret to say, economically weak, certainly in terms of our growth, should make a substantial contribution across the balance of payments to their economies, without limit in time or in amount under the formulae of the Communities' taxation that have been agreed. So one cannot help but have the most serious worry and concern about this.
I regret very much that the right hon. and learned Gentleman rejected the very serious proposal that there should be a Select Committee on the terms of entry, which would have allowed us to explore these matters as they deserve to be explored.
Before I leave the question of the terms of entry buried or missing in the Treaty of Accession I return to the point about the veto, on which the right hon. and learned Gentleman and I have faced each other at 4 o'clock in the morning and on another occasion at 5 o'clock in the afternoon and are facing each other today for the third time. Throughout our debates, as he will know, it has been an important part of the Government's case that they have a fall-back position, that we need not worry too much about a particular set of inadequate terms in the negotiations because when and if we become a member and when particular matters needed to be renegotiated we should be able to get our way by insisting that the matter in question was of vital national interest to us and the other members would then have to accept our view.
I am sure that that rings a bell with the right hon. Gentleman the Secretary of State for Trade and Industry, because he used precisely this point—incorrectly, I think—when trying to defend himself against charges that membership would damage our regional policies. It would be wrong to single out the right hon. and learned Gentleman because other Ministers have made precisely the same point. I do not believe this claim. I want to get this finally clear today. The fact is that in the matters with which we are all familiar, whether they be fishing, Com-

monwealth sugar, New Zealand butter, or any of the other matters, the Government have negotiated a time-limited waiver from the Community rules. The House would probably agree with that description. When the time expires, those waivers can be extended only if the community agrees to it. All that we can say is that it is extremely unlikely that we should be able to get more than a small part of what we want when the agreements for Commonwealth sugar, New Zealand butter and fisheries come up for renewal, respectively, in 1974, 1977 and 1982. Why we should find it difficult to persuade the majority or the whole of the Community to support us in these matters is obvious: it is because our interests in these areas clash very much with theirs.
One area of the negotiations in which Ministers have not claimed that there will be either a review in the future or a British veto is, significantly, the area in which we can expect to incur the greatest damage to ourselves. I refer to the cash contribution we shall have to make to the Community under the "own resources" rule. Every other area of negotiation has been referred to during previous debates in relation to a national interest veto, but not this one. The omission is significant.
In earlier debates all that Ministers could say about it was that if
unacceptable situations arise, the very survival of the Community would demand that the institutions find an equitable solution.
Perhaps it is not surprising that this flabby piece of prose is not reprinted in the Treaty of Accession. But the Prime Minister knows, as President Pompidou knows, that there is no possibility of either a renegotiation or a veto here in this matter. Probably no right hon. or hon. Gentleman will rise to challenge me about that.
All that the Prime Minister can offer the House, on this matter, is what he said on 21st July:
The fundamental question for the House is really this: do we believe that the Community is now, aid will be when we are in it, the kind of body that will approach these matters"—
that is, Britain's debt to it and our continued contribution—
in a positive, constructive and reasonable manner?"—[OFFICIAL REPORT, 21st July, 1971 Vol. 821, c 1465.]


I should have required a much stronger guarantee than that. I see nothing in the course of the negotiations, or the previous negotiations, that would permit me in clear conscience to put my country's fate and the vast sum of money that will be extracted from it year by year in such pawn and at such risk.
One last point about the veto is that, while it does not and cannot apply to the agreements and arrangements which have been already made by the Community and which the present Government have so disastrously accepted, none of the matters which I have mentioned, which have been already agreed by the Community, is subject to any British veto. The veto can be used—this is the source of confusion—on future Community policy specifically where the Rome Treaty allows it, when it says that decisions will be taken unanimously, but, less clearly, if major nations assert the need for unanimity. Whereas the treaty says that there should be qualified majority voting, President Pompidou has made it clear that on future Community policy he will insist on unanimous decisions where the treaty talks about qualified majority voting on future policy. The Prime Minister at his meeting at the Elysée, as we all know, has stated his full concurrence with the President of France.
But there is no joy for us in this, for while the Common Market agricultural policy and its financing impose disastrous burdens on us, and cannot be vetoed by us—the policy can be changed only by unanimous agreement or by heavily qualified majority voting—the only hope of mitigation of these burdens for us lies in the development of common industrial and regional policies which would reverse the cash flow in our favour. Yet it is precisely on those policies that the President of France will be free to exercise his veto. It is of great concern and potential damage to this country that there is no British veto of what has been agreed, and for the past 13 years what has been agreed in the Community is basically the self-interest of France. There is a power of veto on those matters which might conceivably be turned to the interests of this country. I hope that someone on the Government Front Bench will give a serious reply to this matter of the veto.

Sir Robert Cary: How can we possibly insist upon exercising a veto in a club to which we did not previously belong?

Mr. Shore: The hon. Gentleman has made the whole point for me, because it is precisely the negotiations about the terms of entry that decide how far what has already happened in the past 13 years will be imposed upon us. The awful truth about the whole negotiations is that every bit of what has happened has been accepted. Every last regulation has been accepted, not in an honest negotiation, putting our interests in one balance and the Community's in another, but imposed upon us. We have been forced to take it or leave it. Unhappily, we have taken it.

Mr. Rippon: Does not the right hon. Gentleman realise that all his speech so far is a reiteration of what some other right hon. and hon. Members opposite said during the debate which ended on 28th October, when there was a decisive majority in favour of entry into the Community on the terms negotiated?

Mr. Shore: I do not agree at all. To begin with, I do not think that the matter has been decided. The vote of 28th October was taken long before the negotiations were over, long before the 43 volumes were published and the other 10 volumes were published here last week, long before we saw the Treaties of Accession. The right hon. and learned Gentleman will have to think up something better than that.
I turn now to the Bill itself. It does not simply accede to all those treaties in the manner I have described and the way the Treaties of Accession lay down. It also, as Clause 2, with which the right hon. and learned Gentleman dealt at great length, makes abundantly clear, accepts
rights, powers, liabilities, obligations and restrictions
arising out of our membership. Clause 2 takes only two pages, and its related Schedule one page more. But it mounts a most serious attack on the power of Parliament, on our democracy and on the freedom of action of any Government in this country. It makes clear, first, that we accept as the law of the land all those rules and regulations that have been churned out during the past 13 years,


without further enactment and only with such discussion as we can maintain during the passage of the Bill. About 1,500 regulations was the right hon. and learned Gentleman's figure. These are now to become law and enforced in our courts.
The Clause also makes clear in subsection (1) that further Community laws can and will be made without approval by Parliament, indeed, without reference to it, unless the proposals the right hon. and learned Gentleman has suddenly introduced today can intervene at this point. So, over a wide area of our affairs Parliament is inevitably doomed to become a spectator of legislative events. Unless the Select Committee can put before us new proposals, we shall be in the position of dealing with Community regulations which Parliament might be able to see, and perhaps even in the end discuss, but which it would be powerless to alter.
As the right hon. and learned Gentleman has made clear, our courts of law will be brought within the Community system, and the final arbiter of all the matters covered by the treaty will be the European Court.
I knew what the right hon. and learned Gentleman would say about all that. He said that the White Paper of 1967 described this situation. It did, but it certainly did not use that as an argument to commend or recommend entry to the House. The situation was what always made it extremely difficult to accept what was involved, and for most hon. Members the arrangements are bearable only if, first, the area in which such powers operate is most narrowly confined, and, secondly, the overall arrangements for entry are clearly to the advantage of this country. Neither of those conditions has been met.
The fact is that the area of Community law-making has widened greatly in the past five years. If we had joined in 1967, not only was the transitional period, when so much was still fluid, still to be concluded, but many of the matters that under the treaty then required unanimity to take effect might never have been agreed.
But that is not all. In 1970—and this relates very much to Clause 2(3)—the Community took what many regard as the most important step in its history.

The member States agreed that the Community itself should have the power of taxation, that it should have its own resources. That is to be found in the separate Treaty of Luxembourg, of April, 1970.
It is a consequence of that decision that the power of taxation, the most jealously guarded of all the powers of Parliament, is in part to be handed over to the Community, which will be able to impose customs duties, agricultural levies and up to a 1 per cent. value-added tax on the people of this country. Along with its power to tax there will go the power to determine expenditure. These matters will be decided not as they have been in the past by the British Parliament but by the Council of Ministers and the Commission.

Mr. Sandys: Mr. Sandys (Streatham) rose—

Mr. Shore: I should like to make one point before I give way. There is nothing in the 1967 White Paper about the Community being given the power of taxation. There was talk about the possibility of harmonising certain taxes where they distorted competition, but while the idea that the Community should emerge as a tax power in its own right may have been in the womb of the Community it certainly was not born, and there was no mention or discussion of it in the White Paper concerned.

Mr. Rippon: The right hon. Gentleman has always suggested that the 1967 White Paper has somehow been overtaken by events. He and the House should know that the then Prime Minister said on 17th February, 1970, that the general assessment in the White Paper still held good.

Mr. Shore: Which White Paper?

Mr. Rippon: The 1967 White Paper.

Mr. Shore: That will not do. Despite his great desire to score points, the right hon. and learned Gentleman must take this matter seriously. Things have changed. A great event occurred in the Community in 1970. I recognise that, and I am not a friend of it. In 1970 it became a great new body because it acquired this power of taxation. Why should the right hon. and learned Gentleman try to deny this or pretend that everything is as it was in 1967?

Mr. Rippon: I am not denying that things changed in 1970 but only that in February the then Government, knowing of the changes that were to take place, reaffirmed that their position was unchanged.

Mr. Shore: I know a bit more about that than does the right hon. and learned Gentleman, and I assure him that he is wrong. I could take him detail by detail through the 1970 White Paper and the debate of that year, but I will not weary the House.
In the light of what I have said, it is not only Clause 2(1), (2) and (3) of the Bill that we must consider. I cannot see how the Government can maintain that there will be, in the words of their White Paper, no loss of "essential national sovereignty." I do not understand how the right hon. and learned Gentleman only a few days ago could say in his Press Gallery speech, of which I have a copy:
For Parliament, far from losing influence, it must gain in stature by Community membership.
It may be the devout wish of us all that that should be so, but on the face of it it is so in conflict with reality and the facts that it is taking a liberty with language.
Another important matter is involved in the loss of decision-making by this Parliament, or in the extent to which our decision-making processes will be curtailed in relation to the Community. The proposal before us—I say this perhaps more to some of my hon. Friends than to hon. Gentlemen opposite—is not to transfer power from our Parliament and democracy—operating, as it must, on the national level—to a new Parliament and democracy of equal weight or stature in Europe.
There is surely one thing about which we can agree; namely, that of all the institutions of the Community, the weakest is the European Assembly. It has no power, it is not directly elected, it seldom meets and it is only a talking shop. I recall the words of Professor Dahrendorf a few months ago. He wrote:
A democrat can only feel shame when he sees adult and, in their own countries, properly elected Members of Parliament playing out the farce that they have to perform ten times a year for a week at a time, in Strasbourg or Luxembourg.

The transfer of power that is being contemplated is not to this talking shop—how could it be a transfer to such a body?—but to the non-elected institutions of the Community; the Brussels Commission, the Council of Ministers and that most important body, the Committee of Permanent Representatives, which the Rome Treaty does not even mention.

Mr. Sandys: Would the right hon. Gentleman feel differently if the European Parliament were directly elected and given more power, which is what many of us feel should, and probably will, happen before long?

Mr. Shore: I cannot and will not give a quick reply to that question—[HON. MEMBERS: "Answer."]—simply because I take the right hon. Gentleman's view on this matter seriously. It would be wrong for me to give a light reply.
I do not personally believe that democracies can be created just like that. Indeed, it is odd that hon. Gentlemen opposite should be putting a question of that sort to me when I thought that it was instinctive for Conservatives to believe that institutions grow and are not mechanically created.
The whole structure of government in Europe is based on a division and separation of powers, and this makes it difficult for us to envisage a similar institution to our Parliament operating on a European level. This opens up a wide area for debate which it would not be right for me to develop this afternoon.
I return to what I was saying about the institution which really matters; namely, the Committee of Permanent Representatives. Professor Dahrendorf, himself a Brussels Commissioner, said of this Committee:
In the past ten years these ambassadors of the Member States in Brussels have themselves dealt with nine out of ten questions that have been put to them without their Ministers ever having heard about the matter … if there are technocrats in Brussels, then these are they.
Thus, what is involved is not merely a transfer of sovereignty from London to Brussels or from Britain to Europe, but a serious loss of democratic decision-making for this country. That is what is greatly in danger now.
Even if the broad proposition in Clause 2 were accepted—and I have not said


anything to suggest that it should be—and even if the terms had been utterly different from those that have been brought back, I believe that the actual form which this Measure has taken is for many people an outrage. Indeed, it is as though it had been designed to give this House a kind of salutary shock, to teach it that it will count for so much less in future. [Interruption.]
Let me illustrate this. I do not pretend to a vast expertise in these matters, which, in any event, will be pursued in later stages of the debate. The very fact that Clause 2(1) is to enact these 1,500 regulations "without further enactment"—[Interruption.] I want hon. Gentlemen opposite to note this. Even if we were quite powerless in the matter, it would surely be better if only to ensure that the House and the citizens of Britain knew what they contained if the more important of these Community regulations had been subject to special and separate enactment.
Is it not extraordinary, too, that the Government should think it right, as Clause 2(2) suggests, that future directives of the Community should be the subject of a Statutory Instrument with the possibility of one-and-a-half hours' debate?
There are many other facets of this matter which illustrate this point and which concern the doctrine of supremacy of Community law over British law. Need the Government have found it necessary to say, as Clause 3(3) says, that judicial notice must be taken by the British courts not just of decisions but even of "expressions of opinion" of the European Court? These are matters which I regard as offensive and unecessary and which must be changed.
I come to what I consider to be the gravest of all objections to the Bill. For the massive changes which the Bill involves, the Government have not obtained the full-hearted consent of either the British Parliament or the British people. There have been many occasions in the past when Measures have lacked public support, but the public have always known that such legislation could be, and often was, changed or amended by successor Governments. It is the clear intention of this Government—it is also the hope of the Six—that joining the Community should be

for Britain a permanent commitment. Moreover, as what I have already said makes clear, accession, as we know, will affect fundamentally the power of Parliament. One may disagree a little on how much but surely nobody in his senses, having read subsections (1), (2) and (3) of Clause 2, could reject that proposition.
All countries have recognised that when major changes are to be made in their constitutions there has to be some special test of the nation's will. Other applicant countries—Norway, Ireland and Denmark—all have written constitutions, and it is part of their constitution that changes of the kind proposed should be subject to special procedures. As many of my hon. Friends will know, Norway requires a five-sixths' majority in Parliament, Denmark need a two-thirds' majority. In addition, all three countries will operate a referendum to make sure that the people understand, and if they so will it they consent to what is proposed.
We have no written constitution in Britain, but we have practices and conventions which are no less important. The last time our democratic rules were substantially changed—and that change was challenged by the Opposition party of the day—was in 1910, when proposals were made greatly to reduce the power, as it then was, of the House of Lords. A General Election was fought on that very issue; and it would have been considered a grave impropriety had the Government of the day attempted to carry out that reform without first seeking an electoral mandate.
What this Bill before us today proposes is far and away more radical than a change in the status of the House of Lords in relation to the House of Commons. For the first time in our history we are to have imposed upon us a written constitution, a constitution that we did not write or did not even help to write. That is the fact. Of course, the Government do not wish to put this matter to the test, and I do not blame them; but they do not need to do so now. Provided that they are ready to postpone the date of entry so that an election, or, if they wish it, some other serious test of opinion, can first be held, that is the basic minimum requirement for the people of this country, for the democracy of this country to continue, and for the people of this country who have faith in it.
I cannot emphasise too much how important I believe this matter of consent to be. When the people feel they are being made subject to laws in which they have played no part and taxes to which they have never consented, respect for both law and government is undermined. Our tradition for order and peaceful change is based not only on the character of our own people but on an enduring, if tacit, bargain between Government and governed that the former will play fair and will be scrupulous in how they deal with the people's rights. But if Governments do not play fair, if they behave in a way people consider to be in itself unconstitutional, there is evidence enough in British history to show we are not a docile people but a very determined and fierce one indeed.
Finally, I put to the Government a very practical reason why they must obtain the prior consent of the people before they proceed with this Measure. The right hon. Gentleman the Leader of the House confirmed to us only last week that no Parliament can bind its successor. What this Parliament has done successor Parliaments can undo—and it may need rather fewer than 12 Clauses to do it. So we must give notice now to the Government, to this nation and to the Six that we shall fight this Measure and we have high hopes and every intention of defeating it. But should the Government somehow get their way and should they succeed in placing this Measure on the Statute Book, then we warn them now that we intend to renegotiate and re-legislate. The argument will not end. No decision that they make can have more than an interim character until the people of this country have been able to vote upon it and themselves decide their own future.

6.5 p.m.

Mr. Douglas Dodds-Parker: We have listened to one of the most extraordinary speeches we have heard for a long time in this House. The right hon. Member for Stepney (Mr. Shore) would leave one with some suspicion, having listened to his speech, that he does not care for the European Economic Community, he does not care for its enlargement and he does not care for any economic co-operation at all.
What I find really disturbing, and I believe a number of hon. Members on

both sides of the House will share this feeling, when one recalls, as I am able to do. the very major contribution made by the Labour Government of the postwar years, the 1945 Parliament, towards re-establishing social democracy on the Continent, is that this speech of the right hon. Gentleman will be read with the greatest sadness by all who still remember—I shall not name them all—Lord Attlee, Ernest Bevin and people of that nature who really were building up social democracy in those days.
By being put up as the keynote speaker on this occasion the right hon. Gentleman has done much to destroy all that. As we know in this House, the right hon. Gentleman has a painfully suspicious nature. I have noticed on several occasions during the time he has been in the House that he has taken an entirely unconstructive position. What really surprises us beyond anything. however, is how, if he really has felt like this about the events of the past five or six years, he could conceivably have remained a member of a Government which was attempting to negotiate just the kind of settlement which has been achieved by the present Government and which every negotiator on behalf of Labour, in this House or in another place, has said would have been regarded as reasonable and acceptable. How was the right hon. Gentleman able to accept office knowing how those negotiators were carrying on when what they were doing was, according to his speech today, entirely unacceptable?
The right hon. Gentleman spoke about Parliament being merely a future spectator of legislative proposals. He cannot have read what has been discussed over the period of the last few years and what my right hon. and learned Friend said from the Front Bench. It was a Socialist Government, under the Leader of the Opposition, who ran out just now, which set up the value-added tax and established a headquarters at Southend. This, as I understand it, was all in preparation for entry into the Community. This, as far as I know, has never been denied. It was certainly the last Government which did that. From what the right hon. Gentleman said towards the end of his speech, it is staggering that he has no personal idea of what is occurring on the Continent, at the Council of


Europe or in the European Parliament. [Interruption.]

Mr. Michael Foot: Mr. Michael Foot rose—

Mr. Dodds-Parker: No, I am dealing with the right hon. Member for Stepney. The hon. Member for Ebbw Vale (Mr. Michael Foot) has interrupted constantly during the last three or four days but with nothing constructive. I am dealing with a speech made by his right hon. Friend. I know that the hon. Member prefers talking to listening but for the moment I am dealing with his right hon. Friend. Clearly, he is entirely out of touch with anything that is going on on the Continent, as a number of his right hon. and hon. Friends on the back benches will tell him, and with what is being proposed by the European Parliament to establish some kind of control; and he does not reply to a direct point put by my right hon and learned Friend about election to and greater power for the European Parliament. Surely, when the right hon. Gentleman is speaking for the official Opposition he can give a personal view of those two points. He says he has not been given the time to do it, but this is one of the great issues which has been discussed in the European Parliament. If the right hon. Gentleman now wants to give an answer, he may do so.

Mr. Shore: Will the hon. Gentleman treat seriously what I said and my reply to his right hon. and learned Friend?

Mr. Dodds-Parker: That is exactly what I am doing, but when the right hon. Gentlemen is officially making a keynote speech on this occasion he cannot even say "Personally my view is this or that" on a matter which has been argued for years in the European Parliament, in the Council of Europe and in all-party groups in this House. That shows how completely out of touch he must be with future parliamentary thought.
I welcome the Bill and congratulate my right hon. Friends on the succinctness of it. It will clearly be a lawyers' delight, and I hope that in the course of time they will work out and regularise the intention of the House, expressed on 28th October by the overwhelming majority of 115—

Mr. Powell: One hundred and twelve.

Mr. Dodds-Parker: My right hon. Friend says that it was 112. It would have been much more than that if there had been a free vote among hon. Members on the Opposition side, as there was on this side of the House. Instead, they were subjected to a strict three-line Whip. The fact is that there was an overwhelming vote in favour of joining the enlarged E.E.C. Parliament having willed the end, as I understand it the Bill is the means to achieve that end.
I do not believe that any great new principle is involved but that an old principle has been extended, as my right hon. and learned Friend has pointed out. Let us recall the transfers of decision-making made under the N.A.T.O. Treaty by the Labour Government after the war and by our adherence to Western European Union and the International Monetary Fund. In all these, we pooled a fraction of sovereignty to facilitate decision-making by ourselves in conjunction with our friends and allies with whom we wished to have closer association. I believe that such pooling is necessary in the post-1945 circumstances, through the United Nations and other co-operation.
Clause 2 of the Bill deals with a special point and no doubt we will discuss it at considerable length. So far as it concerns the delegating of legislation, I remind hon. Members that a great deal has already been delegated by this House to Whitehall, and probably, as my right hon. and learned Friend has said, there will be need for some parliamentary method—Select Committees or some other set-up—to look into these instruments and proposed legislation.
The institutions of the E.E.C. are of a newer and more modern type. A lot of thought has gone into the establishment of the Commission and of the European Parliament. These are both organic and evolving and have, I believe, already got quite far beyond the Treaty of Rome and the 1958 concept. The consolidation of the European institutions, including the Coal and Steel Community and Euratom, is on the lines that you, Mr. Speaker, proposed in 1956 in another incarnation. I am delighted that the Bill now sets out to consolidate those institutions.
I believe that in all this, without arrogance, this country and all Members


of both Houses of Parliament have very much to contribute. As the American Bar Association says when it meets from time to time in Westminster Hall, this country is supreme in establishing institutions to maintain freedom under the law. That is what I believe we are offering through the Bill. The 1930s proved the necessity for unity in Europe to my generation and I believe that this is a concept to which many people in all our political parties have contributed and to which they will contribute in future.
Those of us who attend the Council of Europe and other such assemblies find very great good will towards Britain among parliamentarians abroad as well as among officials. Like most of us, they have seen two great civil wars of Europe and are determined that the same thing shall not happen again. I believe that had the E.E.C. existed at the time, we would have avoided at least one of the last two world wars. I have instanced before in the House Dr. Bruening in 1929. I do not doubt that, if the E.E.C. had existed, we would have avoided the arrival of Hitler three or four years later. I believe that we in the United Kingdom must help to consolidate the progress made in the last 20 years and that this Bill is a method of taking part in the future development of Europe.
There are two points calling for early action. Once the Bill becomes law there will be a growing involvement of parliamentarians. We are already beginning to discuss privately with other parliamentarians and officials of the Council of Europe the future of the European Parliament. A delegation from this House went to the European Parliament some months ago and today we welcome a return visit. We have so many friends. Listening to the right hon. Member for Stepney, one would think we were among a lot of people trying to do Britain down. The right hon. Gentleman should really go out there, as an ordinary back bencher, and see the immense good will there is towards this country and the great desire to bring in our institutions and political parties in co-operation and the harmonising of policies.
About a month ago some of us were at the Council of Europe in Strasbourg and in three days we discussed the Ostpolitik, pollution, agriculture and the European

monetary system. The day I arrived back, the House was discussing the Gas Bill and the Museums and Galleries Admission Charges Bill. Important as those Measures are, I wish we had more time to discuss the rather wider issues which are of prime importance to the future of the country.

Mr. Nigel Spearing: I am glad that the hon. Gentleman has mentioned those discussions in Strasbourg. Does he realise, however, that I have been told, in answer to a Parliamentary Question, that there is no regulation under the Brussels Treaty for preventing the pollution of European rivers, including the Rhine? Can he tell us why this matter of major concern is not part of the E.E.C. legislation?

Mr. Dodds-Parker: That is the sort of thing we have to institute. That is what we will want to do in the European Parliament. That is why the Europeans want us in. They want us to introduce constructive ideas and policies. They want us to work with them to ensure that these things are done.
Secondly, we must consolidate. I believe that there are five international assemblies at the moment. There are too many of them and there is too much overlapping. We have to reduce that number and also the number of committees, shorten the procedure and strengthen the European Parliament. We must strengthen the contacts of the European Parliament with the national Parliaments, because they will have to work very closely together. It will be difficult to do this if the European Parliament and the British Parliament both sit for 150 days in the year. The workload is very considerable and we must consider this question. The right hon. Member for Sheffield, Hillsborough (Mr. Darling), who is a great expert on this, will help, I hope, and certainly Mr. Speaker and the Table Office have a major contribution to make.

Mr. Neil Marten: This is an interesting point and one in which I have been extremely interested. Can my hon. Friend give his own views of how the European Parliament should operate? Does he envisage Members of this House becoming also Members of the European Parliament, or would they be separately elected? What are my hon. Friend's final views?

Mr. Dodds-Parker: I do not want to take up too much time as so many other hon. Members want to speak. There will obviously be a transitional period in which a number of hon. Members will have to attend the European Parliament as a number of them now attend the Council of Europe. That will be from 1st January, 1973. But sooner or later we will have to have direct elections to the European Parliament. This is one of the things which hon. Member on both sides will have to work out. But there will be a transitional period in which the British Members of the European Parliament will have to be Members also of this House, at the same time.
I believe that the procedure of the European Parliament can be shortened and the work of the committees and the Assembly given the sort of help which we have had from Mr. Speaker and the Table Office in this House in the past. I remember that the right hon. Member for Kettering (Sir G. de Freitas), when he was President of the Assembly of the Council of Europe, tried to get the Assembly to start on time and got himself into trouble by doing so. Nevertheless, punctuality in starting is one of the little things which can add considerably to the better working of institutions.
I hope that by these two practical suggestions one can do something to ensure the necessary and growing parliamentary support for the Council of Ministers and the Commission on whom, as the Bill adumbrates, the main responsibility at the moment rests. It is too early to sum up and probably one will never be able to do so, but my generation has seen the economic difficulties of the 1930s, the nearly-too-late reaction against the dictators, the Second World War and the change from Empire to Comonwealth pass into history. Through this Bill we have a great chance to put imagination, experience and energy, especially of the young, into a new endeavour to help ourselves and others in and beyond the European Economic Community in prosperity and freedom.

6.21 p.m.

Mr. Bert Oram: The hon. Member for Cheltenham (Mr. Dodds-Parker) suggested that this debate should be seen as a consequence of the debate we had in October when there was a very considerable majority in favour

of the principle of this country entering Europe. I think he will find as this three-day debate proceeds that many of us will wish to see it conducted not in the way he suggested, but in a much wider context, particularly in the context of the Government's whole approach to the Treaty of Accession and its consequences and the way in which the Government have disregarded what we consider to be the proper rights of Parliament to examine the whole question of British entry.
Of course the hon. Gentleman, and, indeed, the Government and their supporters, would be delighted if on Thursday evening all who voted in the Aye Lobby in October were found in the Aye Lobby again; but that most certainly will not be the case. I speak as one who was in the Aye Lobby on that occasion. I make no apology to anyone for having taken the difficult decision to vote against my party, but I shall certainly be in the No Lobby on Thursday night, and I am glad to have this opportunity of explaining what admittedly is a contradiction of strict logic. In parliamentary affairs it is often the case, and I believe it must be the case in this complex issue of the Common Market and Britain's attitude to it, that strict logic cannot be pursued.
Throughout the debate over the last 10 or more years on this subject, it has always been very certain in my mind that this issue is one of the most complex, most difficult, public issues that this House or this country has ever had to face. Not only is the analysis of this problem extremely difficult, but I believe factors have changed over time. Frankly, 10 years ago I spoke in this House as an opponent of British entry into Europe but I believe that certain important factors have changed. It was for these reasons, and others, that I voted as I did in October, but it was only after careful weighing of the complex issues involved that a minority on this side of the House went into the Government Lobby on that occasion.
Not only is the issue complex. When I voted on that occasion I was more than ever conscious of something that I am sure all hon. Members on both sides of the House are often conscious of—the many conflicting loyalties that we have to try to serve when we vote and speak


as Members of Parliament. It is no longer the simple case, as Burke once posed it, of, "Are we delegates of our constituents or are we representatives?" Parliamentary life today is much more complex than that. There are many pulls of loyalty that we have to try to reconcile. If I were to list those which I try to reconcile they would number six or seven. There were the views expressed by my party at its conference and at its meeting upstairs here. In my case there were the different decisions of the Cooperative Congress to which I owe no little loyalty. There were representations made to me from my constituents. There was my understanding of what was in the interests of my constituents, which was not by any means the same as the way in which they expressed their views to me.
In particular, there was my sense of commitment to the Labour Government's application to join Europe combined with my assessment of the negotiated terms which I believed, and still believe, to be not radically different from those which a Labour Government would have achieved and would have recommended to this House. If therefore one has in mind, as I think we must have, in the first place the complexity of the issue and in the second place the complexity of the loyalties which we have to try to serve, it is not surprising that there is a kind of contradiction which I frankly recognise in my case in voting Aye in October and No this week.
The reason is that in debating this Bill we have come to a very different issue from the issue of principle which we were deciding upon in October. This Bill provides powers in respect of entry to this Conservative Government. We cannot separate consideration of the powers that we are asked to confer from the question of who is to exercise those powers. In my view this Government have proved completely incapable of exercising the important powers and taking advantage of the important opportunities which British entry into Europe would provide.
I take four contributions, or advantages, which attach to British entry into Europe. In each case I believe the policies that this Government are pursuing and their lack of success in administering the affairs of this country

make it sure that they are not a fit body of men to take Britain into Europe.
My first point, which was in mind when I voted in October, is that British industry, certainly in the long run, stands to benefit from having available to it a much larger, duty-free market in which to sell the goods which British technology is increasingly able to produce. But the integration of British industry with the industry of Europe and taking advantage of that wider market is an operation needing considerable skill and considerable expertise in the exercise of government influences in conjunction with industry.
I ask myself: can we trust this difficult operation to a Government with such a tragic record at home, a Government which have divided workers from management through the Industrial Relations Act, a Government which have allowed unemployment to reach the present tragic heights and which are now presiding with gross incompetence over one of the worst industrial crises in living memory? We are not entitled to confer the powers which this Bill proposes on a Government with that record.
Secondly, I believe that Britain in Europe could have an important contribution to make in terms of democracy. Here I agree with a great deal of what was said by the hon. Member for Cheltenham. Opponents of British entry point to the Community's bureaucracy. They rightly point to the democratic weaknesses of the institutions of the Community. They are right to do so. They seem to think that we have in Brussels an inflexible, unchanging situation, whereas I believe that Britain in Europe could bring an important and powerful influence to bear in improving the institutions of the Community. Here again, I do not believe that we can entrust this operation to a Government which in the process of taking Britain into Europe have shown such disdain for this Parliament.
The last time the House debated these things it was as a result of the signing of the Treaty of Accession by the Government before the House had had an opportunity to debate it. The Government rested their case on the fact that this is the usual procedure for the signature of treaties, not recognising as everyone surely recognised that this is a treaty with a difference. This involves the whole


economic and social welfare of the British people, and it ought to have had a very special examination by Parliament.
The hon. Member for Cheltenham described the Bill as succinct. That struck me as a euphemistic expression for a Bill which is little more than a trick of legislation and a means of bypassing Parliament over many of the considerations involved with British entry. We welcome what the Chancellor of the Duchy told us about the setting up of an ad hoc Select Committee with certain powers to examine instruments. As he was announcing that, it occurred to me that it would have been well to have had some body representative of this House which could examine the vast volume of legislation already enacted in Brussels, which this Bill will make the law of the land. We ought to have had a special Select Committee to enable Parliament to examine that amount of legislation meticulously. These are massive defects in the Bill and the Government's presentation of it. We cannot entrust the important operation of improving democratic procedures to this Government.

Mr. Marten: Did the hon. Gentleman take that view on 28th October?

Mr. Oram: I pointed out in my opening sentences that I regard this as a highly complex situation. I do not take the simplist view that the hon. Gentleman takes on this question. I envy the simplicity of his approach, to be able to see the true light through all the complexities. The pros and cons have to be weighed. It is possible to go into a Lobby recognising that in the other Lobby are people with strong arguments and genuine opinions.
The third contribution that Britain could make to Europe is related to foreign policy. When I was an opponent of entering, Dr. Adenauer was in power in Germany. In my opinion, he and others wanted to use the E.E.C. simply as an economic base for anti-Soviet foreign policies. I believed this to be against the interests of world peace. That situation has changed, and Germany is now led by Herr Willy Brandt, who is conducting his Ostpolitik, which is one of the most hopeful and significant trends in international affairs. I would like to

see a Britain in Europe led by a Government anxious to work side by side with Herr Willy Brandt's Government to establish better East-West relations. This Government with certain skeletons in their cupboard over East-West relations are not the kind of Government to which this kind of delicate diplomatic operation can be entrusted.
Another contribution I would like to see Britain making in Brussels involves relationships with developing countries over aid and trade. I do not accept the view sometimes put forward that Britain's membership of the Community is inevitably and necessarily detrimental to the interests of the developing countries. There is plenty of evidence if we look at the figures to show that it may be in the interests of the developing countries for Britain to join Europe. With our unique relationship with so many different members of the developing world, having been at the head of a Commonwealth of nations, we have a unique contribution to make in Brussels. When we see Britain led by a Government with the record that they have in Rhodesia we have to ask whether that is the kind of Government that can go to Brussels and dare to suggest that Britain under their leadership understands what is in the interests of the African people. For these reasons I shall be voting against the Bill, because I believe the Government are unworthy to exercise the powers in the Bill. I believe that this country should be in Europe but that this Government are unfitted to lead us in. It is the duty of the Opposition to oppose this Bill and the enabling legislation, but I hope that we shall not do it in a purely negative way.
There is a vast amount of positive and constructive work for us to do, and I hope that the movements from which we on this side of the House derive our strength will use the coming months not only politically to oppose the Government and all their works but also diplomatically. We can exercise diplomatic influence in Europe, forging links wherever possible with the Socialist Parties, the trade unions and the co-operative movements of Europe, working out practical proposals which we, by our united efforts, will seek to implement in the years that lie ahead.
That I believe to be the task of my party, not opposing for the sake of opposition, not being negative for the satisfaction of saying "No", but facing the future realistically and getting ready for the day when we on this side of the House will be speaking for the nation, and can best speak for our nation from within and not outside the larger European assembly of nations. That I believe to be our duty, and we shall move forward to it.

6.41 p.m.

Sir Derek Walker-Smith: The hon. Member for East Ham, South (Mr. Oram) confessed that his action in voting for entry on 28th October and voting against the Bill was a contradiction. With all respect, I found that confession easily the most persuasive and convincing part of his speech, which, contained a few routine and pejorative attacks upon the Government and all their works, which were misconceived and unfounded.
The hon. Gentleman sought to base his proposition on a distinction between these two matters on the ground that one raised an issue of principle and the other not. He could not be more wrong. The argument is wholly unfounded and untenable. As I shall seek to show the House in the course of my argument, the Bill raises the question of principle in a direct and clear form. It is indissolubly linked with the proposition of entry, as I shall seek to show.
This is a short Bill, but it comes at the end of a long argument. Its provisions conclusively prove, as I and some others on these benches have maintained from the outset, that entry to the Community involves as an inescapable condition substantial and irrevocable sacrifice of the sovereignty of Parliament and the subordination of British to Community law over a wide and varied range of our economic and social life. It was for that reason that I told the Macmillan Government in 1961 that I could have neither part nor lot in the thing they sought to do.
The knowledge of what is involved in entry in these respects should not surprise even those who could not see the truth in 1961, because the subordination and the sacrifice were clear to see, despite

perhaps some deprecatory glosses, in the White Paper of 1967 on the Legal and Constitutional Implications. For that reason, I, again with other of my right hon. and hon. Friends on these benches, opposed the proposition of entry. On that occasion I said:
Parliament here would not be able to reject or vary the regulations. The collective laws of the Community would bind the individual British citizen, and Parliament and the courts alike would be powerless to intervene."—[OFFICIAL REPORT, 10th May, 1967; Vol. 746, c. 1618.]
If the White Paper of 1967 shrouded the scaffold in deference to sensitive observers, the Bill displays the axe and the block for all to see, but it is doing only what the White Paper foresaw that the Treaty of Rome requires. If the Bill is harsh it is because the requirements of the treaty are harsh. If the Bill erodes the power and purpose of Parliament and makes deep and unprecedented inroads into our democratic institutions, it is because these things are a condition of entry.
On that account it may perhaps be an odious Bill, but at any rate it is an honest Bill. Clause 2 is drafted, and impeccably drafted, to give precise effect to Article 189 of the treaty. The key words of the article are that the regulations are to be directly applicable. If Britain were to seek to join the Community and failed to ensure that the regulations are directly applicable in this country, we should be in breach of our treaty obligation. The obligation goes with membership. If we accept the desirability of membership, we accept the necessity of the treaty obligations, and the simplest way of meeting these obligations is to enact as has been done in Clause 2. The Clause has the virtue of honesty. The obligation is clear, and effect is clearly given to it.
I am against Clause 2, but not because of its drafting. I am against it for the same reason as I am against Article 189. I am against it for the same reason as I was in 1961 and 1967. We cannot logically accept entry and reject its requirements. They are the obverse and reverse of the same medal; they are linked together like Siamese twins by their nature and subject matter. To dress up the obligation in a cloud of words and schedules would have been possible as an exercise in draftmanship, but to set out word for word and syllable for syllable


what is in the Community regulations—and nothing less would meet our obligation under the treaty—could not lessen one jot or one tittle the surrender of sovereignity and the subordination of our law. It could, at most, conceal it. It might perhaps conceal the iron fist, not in a velvet glove, but in some shoddy, shabby, synthetic covering, behind which the iron fist of Article 189 would remain the harsh and inescapable reality.
Clause 2 is the heart of the matter. It gives effect to Article 189 by making Community regulations what are called "enforceable Community obligations". Perhaps coyly, the draftsman has not spelt out this unattractive phrase in the Clause. He has left it to be inferred from a delicate reference to "enforceable Community rights and similar expressions". The Clause makes the Community regulations ipso facto part of our national law to be enforced as such in the courts. If the Bill is passed that will happen without the right of Parliament to amend a single syllable of those regulations, without the right to uncross a single "t" or undot a single "i". That would happen even if every hon. Member wished in his heart to reject both the form and content of what is proposed to be done.
We can trace the course of the regulation. It would come from Brussels and immediately become law under the terms of Clause 2. It would be enforced in the courts merely on the production of a copy of the Brussels regulations certified by an official in Brussels of whose existence we are unaware. It would not be possible to query the regulation, either in the courts or in Parliament. Not only are the regulations directly applicable but they are also, in the words of Article 189, "binding in every respect".
If the citizen is in breach he presumably can be committed for contempt. That means he would be liable to imprisonment until he has purged his contempt, and this means until he has complied with the Community obligations—an obligation in the formulation of which he would have had even less say than Hampden in the formulation of ship money—and we know what Burke said about that. Twenty shillings would not have cost Hampden his fortune, but the payment on the principle on which it was demanded of half that sum would have made him a slave.
What of the future regulations? Under the Bill and in law the position of future regulations will be the same as the existing regulations. The wording of Clause 2 makes that clear
All … obligations … from time to time created or arising by or under the Treaty …".
This means that every future regulation emanating from Brussels will be incorporated into our law ipso facto, holus bolus, lock stock and barrel, hook line and sinker, just as in the case of regulations already existing.
It is suggested that in practice we would have some say in the future regulations. But how much say? And who is "we"? It is certainly not Parliament. The regulations will be made by the Council of Ministers on the proposal of the Commission in what primarily is a bureaucratic exercise between the Commission and the permanent representative in Brussels. The Council of Ministers may collectively have some say, but collectively they are not responsible to any national Parliament. Individual Ministers may be questioned in their own Parliaments, but the answer will always be the same. They will point to the Treaty of Rome and say, "What can I do? We are powerless in the face of the Commission and our colleagues on the Council."
The debate by Parliament of draft regulations referred to by my right hon. and learned Friend might prove to be an interesting exercise, but will be largely or even wholly academic. The formulation of the regulations is dealt with by the treaty. The treaty provides in Article 49 that, unless the Council of Ministers unanimously agrees, the Commission's proposals cannot be amended. The House will see that, the bigger the Community, the less the chance of the required unanimity; the bigger the Community, the bigger the power of the Commission. Ministers will shrug their shoulders and say, "It is annoying, but there is nothing we can do about it".
These are the realities of the matter, in law and in practice. The Commission will have a great say; the permanent representatives on the Council and the Ministers collectively will have considerable say; individual Ministers may have some say; but Parliament, to all intents and purposes, will have no say. Our


Ministerial representative will be unable to secure amendment unless he can carry with him each and every one of his nine colleagues on the Council. Once the Commission's proposals take the form of regulations, then immediately we are bound by Article 189 and Clause 2. We would have to swallow them undiluted at a single gulp, no matter how bitter the draught may be.
Suppose we did not do so. Suppose the House were to reject its mute, inglorious rôle. Suppose it were not prepared to accept the eunuch's rôle of titular responsibility without real power. Suppose it felt that the rights of Parliament were not or should not be at an end. Suppose Parliament had the temerity to reject, or even to amend, a regulation. Suppose Parliament sought to pit its sovereignty against the overriding authority of the Community. Parliament would clearly be embarking on a lost cause. The treaty would decide decisively against it.
The treaty tells us that community law must prevail mid that the regulations are "directly applicable". Clearly, we should be in breach of our self-assumed obligation. The treaty provides remedies for such breaches. It can be seen from Articles 169 and 171 that this is a matter first, for the Commission and then for the Court of Justice. The Community Court would decide, and Westminster would yield to the wisdom of Luxembourg.
It may be said that this argument applies only to the regulations, that if the directives will have to be applied by statutory instrument, and, therefore, Parliament will have a say. This is true, but it will be only a limited say—a say as to the form, not the substance. In the elegant idiom of Article 189, we would only have a "competence as to forms and means". The "result to be achieved" by the directive will be binding on us, and so Parliament will have only a limited jurisdiction and only a narrow responsibility. Therefore, it is a small crumb of comfort—and it is getting smaller.
Some five years ago directives loomed large on the Community scene and regulations were more occasional. In 1966 there were 753 directives and decisions, and only 230 regulations. But by 1971 the directives had gone down to something over 400 and the regulations had gone up to 2,893. Therefore, the propor-

tions have been dramatically reversed. The Community now legislates overwhelmingly by regulations—by that form of procedure in which Parliament would have no say at all.
This is the reality of the prospect before us—the total subordination of Parliament over this wide range of our economic and social life. Surely Mr. Leolin Price, Q.C., was right in writing to The Times:
It is difficult to believe any Englishman, however entranced by magical dreams of future advantage from our membership, could view this prospect without fearful misgivings.
It is because of the strength of these misgivings that so much is made of the so-called right of veto—a right which it is suggested we have under the Luxembourg agreement—or, more strictly the record of disagreements. Aided by constant and soothing reassurances, the "Luxembourg agreement" and the "right of veto" have assumed an almost magical significance in the eyes of the more credulous and euphoric advocates of entry. The suggestion is that we or any other member State could at will insist on unanimity even where the treaty prescribes a majority or qualified majority. These matters are presented as the universal elixir against all future ills, a universal escape mechanism from all unwelcome obligations, of almost Houdini-like efficacy and ingenuity.
I am sorry to have to shatter the illusion, but I see no substance in this—like the emperor's clothes in the fairy tale. How could it have substance? How could any organisation, least of all so tightly knit and rigidly centralised an organisation as the E.E.C., proceed on the basis that collective and binding decisions would be at the mercy of the unilateral veto of one member exercising his own judgment as to what constitutes a thrreat to his own country's national interest? The proposition has only to be stated for this absurdity to be apparent. A darts club could not be run on that basis, let alone the most centralised, most institutionalised, most bureaucratic and most multinational organisation ever moulded by the act of man.
One Minister could claim that a regulation without amendment would prejudice the vital national interests of his country. Another Minister would counter-claim


that if the amendment were made it would prejudice the vital national interests of his country. What then, if the matter is not to be resolved by law, by the Court of Justice in the clear terms of the treaty, and if for these there are to be substituted the amorphous, imprecise and impracticable provisions of the Luxembourg record of disagreement? How will matters be decided? It can only be by the chaffering of the market place, by a trial of strength, by the law of the jungle. It reduces this noble concept to a free-for-all, catch-as-catch-can, devil take the hindmost operation, and the edifice of co-operation and idealism—the raison d'être of the Community—would quiver and crumble in the dust.
The Luxembourg arrangements will not protect us. No right of veto will save us from the rigours of the treaty or free us from the obligations that we are asked to assume. Let there be no illusion about this. I must say to right hon. and hon. Members who cherish any such illusion, in the words of Hamlet's exhortation to his mother,
Lay not that flattering unction to thy soul.
We have this position. The Treaty of Rome imposes severe obligations and constitutional sacrifices on all who seek membership. These obligations will be imposed on us and these sacrifices required of us are without mitigation or abatement.
But it is said that other countries have made these sacrifices and not found them unduly irksome. I cannot accept that as a parallel. In saying that, I mean no disrespect to the Six. I have never said, and I never will say, that our institutions are better than theirs, still less that they would suit their countries better. All that I have said, and all that I say now, is that they are different. In the context of parliamentary institutions and the sovereignty of Parliament, we are not comparing like with like.
Our parliamentary institutions are the product of a slow unfolding over the generations. Here where we sit today parliamentary democracy had its genesis, cradled in the care and fostered by the faith of our forefathers. The Six, by contrast, are mainly young in nationhood and younger still in parliamentary

institutions. Of the Six, only two have histories as nation States of substantially over 100 years. Two practice, in substance or in form, a presidential system. Only the Bundestag has a Question Time on the British model, and the Bundestag sits on average only 45 days a year. In the Netherlands, Oral Questions average only 10 a year. It is true that there is a half-hour Question Time each sitting day in Belgium, but there are no supplementary questions. Clearly, there is no precise parallel. None of the Six has parliamentary institutions with the deep roots, extensive rôle and high regard obtaining here.
Let there be no mistake: we would be asked to make a sacrifice beyond that exacted from others. Our sacrifice would be greater because of our long and deep attachment to parliamentary institutions. It would be greater, too, because those other countries at least had a share in fashioning the laws to which they owe obedience, whereas we would be bound by laws in the making of which we had no hand.
I do not want to see this Bill on the Statute Book. I wish the Government well, of course. But I believe that the Government and the country would be better off without the Bill. If the Government do not get the Bill, it will mean that the Prime Minister's expressed condition of entry is not satisfied: there will be no full-hearted consent of Parliament. It will show that the vote of 28th October was not meaningful in that the purported majority for entry was based in large measure on shifting sands, on the votes of right hon. and hon. Gentlemen opposite who, having purported to will the end, refuse to will the means.
The vote on this Bill, in a more meaningful and practical sense, will be a vote on the principle of entry. I say with clear confidence that if the Bill is not carried Britain will never join the European Economic Community. For me, that would mean the end of a 12-year struggle, as it would for my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton). But it would not only be an end. It could be a beginning. It could provide a new chance for the Government, if they will take it, to shake off the shackles of the Treaty of Rome, a chance for the Government to seek new forms of co-operation by way of


association, not integration, a chance for Britain, in the Churchillian phrase, to be
…linked but not comprised, interested and associated but not absorbed.
It would give Britain a chance to seek new friendship with the Six, strong and sincere, close, cordial, and in full conformity with our traditions, our sovereignty, our institutions and our way of life.

7.5 p.m.

Mr. George Darling: The best I can do in following that powerful, lucid and extremely critical speech is to say that, even if I were enthusiastically in favour of Britain entering the European Economic Community, I should have very grave doubts about whether I ought to support the Bill until the criticisms and the questions had been dealt with properly.
I want to raise some rather narrower questions dealing with the procedures and the methods of working of the Community, especially in terms of the European Parliament, which is the question that was asked by the hon. Member for Banbury (Mr. Marten). However, before I do that, I want to express a critical view of an aspect of our discussions which I find extremely irritating.
Towards the end of his speech, the Chancellor of the Duchy of Lancaster said that the Bill would enable us to play our full part in helping to create a united Europe by our joining the Economic Community. My hon. Friend the Member for East Ham, South (Mr. Oram) said more than once that we were discussing an application to join Europe. Of course, it is utterly misleading to talk about our going into Europe or our helping to create a united Europe by joining the Economic Community. We are already in Europe, and we shall play our part in helping to create a united Europe regardless of whether we join the E.E.C.
It is well to point out that, even if the E.E.C. is enlarged to 10 members, it will still be only a part of Europe. There are 28 European sovereign countries, excluding Russia and places like Lichtenstein, Andorra and the Isle of Man. There are 18 which will be outside the Community. Some will apply for associate membership. But half of the European countries will still be outside the Community. What I find unacceptable in the statements that we hear from the

Government is that we have no proposals before us for bridging the divisions which exist in Europe at present.
I was glad to hear the right hon. and learned Gentleman give his views about how he proposes that this Parliament should examine and approve or otherwise the Community's proposed instruments. Apparently we have to accept all that has gone before. We are now looking to the future. We need to know the extent to which our examination of those instruments will give us authority to amend them. This is a point which has been raised by a number of hon. Members before. We want to know whether the regulations, the directives and the decisions which will come from the Commission will be submitted here before they go to the Council of Ministers and what we can do with them.
I am very glad that we are to have an ad hoc committee of both Houses to examine the regulations, the instruments and the decisions. But I need to know a great deal more about the composition and authority of that committee. I assume that it will be a Select Committee. Will it bring forward proposals to this House on how we should deal with the regulations and whether we should accept, reject or amend them? If the committee brings forward its own proposals, will we have authority, before any decisions are taken by the Council of Ministers and by the Committee of permanent representatives which now seems to be the key organisation in the Community, to reject, to amend or to do anything more than merely express an opinion?
I suppose that we have to discuss and question the Bill on the assumption that it will be passed and that we become members of the Community. One decision which has to be taken if we pursue it in this way is how we would play our part as a member of the Community in making it more democratic.
The Minister will probably know—at least, he should know—of the proposals which have been put forward by the Socialist Group in the European Parliament. That is the largest single political group but, I regret, not the majority group. The Socialist Group is concerned, as all of us are, about the lack of democracy in this whole set-up and it has put forward some proposals. I will not


go through the whole lot, but four of them are extremely important.
The first proposal is that the directives and recommendations from the Commission should be submitted to the European Parliament for approval before submission to the Council of Ministers. The second is that the European Parliament—at the moment it is only an advisory council; it has not authority to do anything—should have debates in which Ministers are compelled to take part, as they do in this House, to defend their views and decisions.
The third proposal is that the European Parliament should have authority to initiate regulations, directives and so on. The most undemocratic part of the Community is the fact that the Commission alone has authority to initiate anything. If the Commission does not initiate anything, the Council of Ministers is paralysed; it cannot do anything. The European Parliament is useless because in the treaty, as every hon. Member knows, the Commission alone has the authority not only to initiate all these laws, regulations, decisions and opinions, but the power to amend them. Nobody else can amend them. It may be true in practice that the views expressed by Ministers, by the national Parliaments and by the European Parliament influence the Commission to amend some of the proposals which it may bring forward, but it is well to know that the Commission alone has this authority. Therefore, the Socialist Group in the European Parliament has put forward these proposals to get a much greater degree of democracy.
The fourth proposal, which is perhaps the key to the whole situation, is that the European Parliament should have greater control of the budget, the financial arrangements and taxation systems of the Community.
The question I now ask the Government is whether, if we become members of the Community, our representatives at the European Parliment and our representatives on the Commission and on the Council of Ministers will all work together to support the Socialist Group's view on how to achieve greater democracy in the European Economic Community. If we have the assurance that they will generally support these propositions, that assurance should receive some indication

in the Bill itself. I think that can be done. I have looked at Clause 2 and tried to understand what is to me an almost incomprehensible collection of words. Having used the word "procedures" in Clause 2(2), it should not be beyond our ability to put forward Amendments to extract the Government's views on the procedures.
I now come to the question which was asked by the hon. Member for Banbury. If we democratise the European Parliament and give it greater control in a democratic fashion over the Community's activities, it will have to meet more frequently. I think that there are now 10 Assemblies a year. That means that a member of the European Parliament is tied up in Strasbourg, Luxembourg, Brussels or wherever it may be for more than 100 days a year. I raised this matter in the previous debate and got no answer from the Government. How do the Government propose that a Member of this Parliament, with constituency obligations and the rest, shall spend 100 days or more in Strasbourg or Luxembourg? It just cannot be done.
Who will represent this Parliament in the European Parliament and play a full part in the work there? If the European Parliament has greater control over the Community, the work which will be done in Strasbourg will not be just sitting around and asking vague questions of the Ministers and the members of the Commission; it will be as active a part in that Parliament as we play in this Parliament.
How are the 36 Members to be elected or appointed? We cannot wait much longer. If the Bill goes through we shall be there as full Members next year. Obviously we ought to have Members going along as observers this year to get the feel of the place and to understand what goes on. My right hon. Friend the Member for Fulham (Mr. Michael Stewart) has an idea that we should divide the country into 36 constituencies and elect an extra Member at the next General Election for each of those larger constituencies, which would represent one-thirtysixth part of the country. I do not know whether that is feasible.
We do not want to end up with 36 Members of the House of Lords going to Strasbourg. That would be disastrous. We must also make sure that


whoever goes, whether appointed or elected, has some association with the Select Committee which will examine all the legislation, the administration and the finances.
I am convinced that at the moment the Government have not the faintest idea how to deal with the situation. It is no use saying that this matter has only just been raised. I am not the only Member who, in the debates we have had over the last year or 18 months, has persistently asked the Government what they intend to do about representation in the European Parliament. The thoroughly undemocratic character of the E.E.C. is the part which needs to be amended by British initiative if we go in.
I want to offer some constructive suggestions about the division of Europe. If we want a peaceful, expanding and united Europe, we must seriously consider the relations between the E.E.C. and other European countries which are not members. We must make greater use of the institutions that already exist which can be used to bridge the divisions and to get common policies on a whole wide range of issues on which the members of the Community can play their part, but only as members.
The first, of course, is the Council of Europe. At the moment it is only a talking shop but it has produced a number of useful policies which Governments have put into operation. I suppose its greatest achievement is the European Convention of Human Rights. But there is a great deal to be done among the 17 democratic countries of Western Europe which belong to the Council in harmonising policies. Even more important, the 17 countries would include the 10, if the Community is enlarged to 10, as well as the associated countries and those which are not associated, to discuss common economic policies.
But this has to be taken further. There are many issues, not only in economic policy but in questions of environmental policy and of pollution, in which the Iron Curtain is complete nonsense. There must be co-operation between East and West.
One of the first institutions set up in Europe for co-ordination of policies, which is still in existence, is the United

Nations Economic Commission for Europe. It still works, but not effectively, because we have paid far too much attention to the Economic Community, the Council of Europe and the Western European Union and not enough to this bridge between East and West. I hope that better use can be made of it.
We want to make sure, if we enter the Community, that it becomes more outward-looking than it is at the moment and that it is concerned about the countries outside, particularly the developing countries. This can be achieved by a proposition now being actively discussed within the Council of Europe that the Council should arrange one session each year at which a special O.E.C.D. report on European economic development will be discussed and the relations between the rich countries of Europe and the developing world will also be taken into consideration. This would mean that the Council of Europe would for the first time provide a parliamentary forum for the discussion of O.E.C.D. reports, which, I think hon. Members would agree, are generally the most constructive and best-informed reports on economic developments throughout the world.
But in order to have this outward-looking discussion, the democratic countries of the O.E.C.D.—I stress the word "democratic" because there must be parliamentary representatives involved—which are not in Europe would also be invited to attend these discussions on what would then be worldwide economic policy—the United States, Japan. Australia, Canada and New Zealand.
This is a very important proposal and I hope that it will come to fruition. But it should be reflected in the legislation which we are bringing forward This should not necessarily be done in precise terms, but the need for a reappraisal of European institutions if we enter the Common Market should be implicit in the discussions on this Bill and perhaps implicit in the Bill itself by, if it is possible to do so, putting forward constructive Amendments—perhaps to Clause 2 and Schedule 2—so that these proposals might be written into the Bill.
But, given the Bill as it is and given my views on making everything more democratic in Europe, I certainly could not vote for the Bill as it stands.

7.25 p.m.

Mr. Peter Hordern: I hope that the right hon. Member for Sheffield, Hillsborough (Mr. Darling) will forgive me if I do not follow his arguments. There must be at least 630 different ways of looking at the Bill, but in two days' time we have to come to a decision. I should say immediately that I am a supporter of the Bill. I have come a very long way since my original very ardent support for Europe soon after the war and in the 1950s, although I thought then that there were material advantages in joining Europe, and I still do. I thought then that we could exert more influence within a large and unified Europe than if we were to remain outside, and I still hold that view.
But Europe has changed in many respects since the Treaty of Rome was signed and that is now the Europe which we shall be joining. My attitude has always been and will always be to seek to do what will best serve British interests as one sees them. I am not swayed, as are some hon. Members, by the common welfare of Europe as a means of serving British interests best. I very much doubt that it would. I say this not because I have any philosophical or constitutional fear for our sovereignty but because there are certain proposals now within the Communities which do not accord with our best interests or, ultimately, with the interests of the Communities themselves and which I think we should do our best to see do not come about.
That is why I take very seriously my right hon. Friend the Prime Minister's assurance that no country's vital interests would be overruled by other members. I rely on this safeguard and on the practice in the Council of Ministers of the unanimity rule. I assume, of course, that we have vital national interests, since there would otherwise scarcely be any point in having a defence for them.
The vital national interests which occur to me are those which refer to the defence of our right to act in our own defence and to take our own actions in the service of our own economic interests. So I must declare at once that I do not regard the forced movement towards economic and monetary union to be in that category at all.
Ultimately, of course, I believe that monetary and economic union is desir-

able, just as I believe that sunshine and rain, in appropriate quantities, are also desirable. It all depends on where one happens to be at the time. But the point is that both must be allowed to happen naturally.
There is no provision in the E.E.C. Treaty for economic and monetary union. Article 104 lays down that
Each member state shall pursue the economic policy necessary to ensure the equilibrium of its overall balance of payments and to maintain confidence in its currency whilst taking care to ensure a high level of employment and stability of price levels.
If that article means anything at all, it is an article in defence of a national view of a country's economic policy.
I therefore admit that I was not much moved by the Community declaration at The Hague in 1969 of its intention to move towards economic and monetary union, or by the Werner Report. When the German mark floated last May and the international monetary crisis occurred last August, any mild apprehensions I might have had that something might be done about economic and monetary union disappeared altogether when other currencies started to float.
Nor was I moved by the Washington agreement which meant that currencies returned to fixed rates though with much wider margins. This arrangement, though not as good as freely floating rates would have been, seemed to me as much as could reasonably be hoped for at the time, particularly if changes in the parities became more acceptable as time went on. But now it seems that those promising arrangements are on their way to being reversed. It looks as though President Pompidou and Chancellor Brandt have agreed to implement the Werner proposals concerning narrower margins and even to co-ordinate their economic policies. That is, after all, what economic and monetary union is all about.
The consequences of monetary union are very considerable, however, because it can result only in a loss of national political control of economic policy. If we are to have exchange rates which do not vary one from another, there must be a common rate of growth, and even of inflation. These rates of growth will not be settled by us or by the Government in power at the time. They will be


settled by a body of bureaucrats who will probably, indeed almost certainly, not be responsible to our constituents. Regional policy, too, will be settled by them. Eventually, if the logic of monetary union is carried out, we shall not be able to decide to reduce taxation or to increase public expenditure as we may wish.
All these I take to be matters of vital interest to us. I am not in the least impressed by the idea that we could be Members of a European Parliament which could decide these matters, nor can a wider responsibility ever compensate for the total responsibility to our country that we bear as Members of this House. If we are to safeguard our vital interests, those interests lie in preserving our right to change the parity when we wish or, better still, to let it float. They lie in doing or not doing those things which are designed to improve the lot of our people, and our people alone. That may sound to some like an insular attitude. That is as may be, but I firmly believe that the cause of European unity, to which I am attached, is best served by the free movement of people, capital and goods between our countries. This is the process required to create that identity of interest which alone can bring about real and substantial European unity.
It seems that the force behind the movement towards a common currency is motivated more by a desire to act in concert against the dollar, especially against the Eurodollar, than to get monetary union for its own sake. I should have thought it would be possible to find other means to accomplish that objective. I hope that our entry into Europe will strengthen the competitive and liberal forces in a larger market, from which we have much to gain. When capital is allowed to move freely within the Community, sterling could become the currency of settlement and there would then be a natural demand for it to be the common currency of Europe. Let us not in the meantime be in any hurry to do anything which may limit our freedom to move in our best interests. That is, after all, what we were sent here to safeguard. Regarding economic and monetary union, it would be best to do very little very slowly and to preserve the right to say "No".

Mr. Marten: Have not the Government given a pledge on the question of economic and monetary union that they will move as far and as fast as the Six? Therefore, how can that be answered?

Mr. Hordern: My hon. Friend is right in mentioning that point. I have taken it most carefully into consideration. I hope that the Government will move as fast and as far the the Community will move in the direction of economic and monetary union, and I hope that the Six will not move at all in the direction of economic and monetary union. I believe that that will be the position.
But the Bill is, happily, not confined to economic and monetary union. I regard it as a passport to a wider community of nations in Europe. No one can tell with certainty how this Community may develop but I am certain that we should be part of it. That is why I support the Bill.

7.35 p.m.

Mr. Austen Albu: It is a good thing that in the speeches of my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) and the hon. Member for Horsham (Mr. Hordern) we have been directing our attention to the future and not to the rather sterile arguments of the past. It is extremely important that during the debate we discuss the policies which the Government would pursue, or which the present Opposition would pursue if they were the Government, if the Bill is passed.
The hon. Member for Horsham made a speech very largely dealing with economic and monetary union, to which I also intend to refer. My remarks will be necessarily from the point of view of a Labour Member of Parliament and a Socialist, and not from the point of view of a Conservative as that of the hon. Member. There will be differences, therefore, and that is very important.
I have never underestimated either the dangers or the difficulties of joining the Community, but I happen to believe that the dangers or difficulties if we now exclude ourselves will be very much greater. I accept that there is bound to be some derogation of sovereignty although we may all argue as to how far we are prepared to go. Perhaps I am


prepared to go further than the hon. Gentleman.
The speech made by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) was based on the principle that he would not accept any derogation of sovereignty or any derogation of the powers of this Parliament. My right hon. Friend the Member for Stepney (Mr. Shore) believes that the Community is a monolithic and hostile body. I do not believe that. I believe that we are about to enter a body in which we shall find friends on some matters and other friends on other matters, but, in any case, a body and a series of institutions which will change over the course of years.
Those who talk about the long period of slow growth of parliamentary democracy in this country should remember that the pace of change at present is very much greater, and we cannot expect an institution in this country or our relationship to the rest of the world to remain static. The dangers and difficulties which undoubtedly will arise from our entry into the Common Market can be overcome only if the Government have a clear and well thought out policy of advance and reform for the Community. It is appropriate that this is what we should be discussing on the Second Reading of the Bill.
It is clear that the policies which would be advocated from these benches will be different from those advocated from the Government benches. We should expect also that the Socialist and Social Democratic Parties in Europe would support the policies that we put forward, and no doubt they would be opposed by the British Conservative Party and by its allies in Europe. But the political future of the Community depends upon developing the politics of social interests and upon those politics replacing the politics of national identity.
Therefore, I believe that we on these benches have a duty to formulate cur own policies because, whether or not the Bill is passed, it remains, as I understand it, our policy in principle to join the Community. No one believes that there will be any very rapid advance towards a federal Europe. In fact, very few people in Britain understand what

federalism means, and the words "federalism" and "confederalism" are often used as though they had the same meaning when, of course, they do not. Therefore, I do not believe that the new Europe of the Community of 10, as it will be in the near future, will become, if it can ever become, a major world power. But if it is to make progress in both the economic and social spheres as well as at the level of international policies I believe that the central policy-making institutions will have to become stronger and not weaker.
I give as an example the common agricultural policy, about which there is general agreement that there must be substantial changes, both in the interests of the people of the member States—and not only in the interests of our people, because many of the other people in the countries of the Community would like to see those changes—and in the interests of international trade. It is unlikely that such changes in a direction of which we would approve—I do not mean the actual abolition of the common agricultural policy—will take place if the pressures of interest groups on individual national Governments forces them to use the veto, which the hon. Member for Horsham was so fond of.
Although major changes of policy must still for a considerable time, I suppose, be subject to the unanimity rule, I believe there must be a speedy enlargement of the areas of policy determined by the qualified majority. No doubt this must lead to substantial institutional changes in the Community, especially in the direction of greater democratic control along the lines which my right hon. Friend the Member for Sheffield, Hillsborough discussed.
While I am on the question of institutions, I should like to ask the Government some questions about staffing, both about the British members who will join the Commission and about the British delegation that represents British interests. I realise that the Diplomatic Service will see the advantages for its members of service in Brussels or Luxembourg, but there are disturbing rumours of the reluctance of other Departments to treat service there as a priority instead of a backwater.
This is an extremely important matter. The development of the central organs of


the Community cannot depend on occasional pitched battles at the summit, but must depend on the day-to-day work of staff of the highest quality. If the Community is to develop as I should like to see it develop, as a really powerful world regional grouping, but also if British interests are to be properly protected, we want not only a staff of very high intelligence but a staff given a very high level of leadership, a staff very loyal to what they are doing. The representation of British interests is vital if the support of the British people for the Community is to be strengthened.
I hope to see the Commission move away from the trivia of regulations, which always create such hilarity in the House, and start developing policies to deal with the great economic problems facing the world. I have already mentioned the common agricultural policy, which is bound to change over the years ahead. Associated with that must be the negotiation of trading rules with the rest of the world to ensure an expansion of world trade and not a decline into economic nationalism which would hinder the growth of Community unity. The coordination of economic policies, which is bound to come and which I very much favour, will lead in the end to economic and monetary union, but it must precede it. We cannot have an economic and monetary union if we have not gone much further in the co-ordination of economic policies.
These developments must not be looked upon as ends in themselves or, as M. Pompidou seem sometimes to think, as means of establishing a sort of metaphysical European identity. Common economic policies and eventually monetary and economic union are worthwhile only if they are thought of as instruments for greater economic and social wellbeing. The Europe of the Community is not just an alliance of nation states; it is also an economic integration of disparate regions differing very much in natural resources and degrees of economic prosperity.
What proposals have the Government for a European regional policy? Are the Government sufficiently aware of the need to have such a policy agreed before there can be move towards more rigid European exchange rates? That, too, is an extremely important matter.
I turn to something, rather different, the question of the large international companies, a matter that must be of considerable interest to our trade unions, which I hope are developing European strategies with their European counterparts. If there is not a concerted European policy for the control of such companies, they will control us by playing off one country against another.
I turn next to Europe's rôle in world affairs. So far, in spite of many conferences and meetings, this has made little progress nor do I expect a great deal from the summit meeting this year. Presumably the Government do not believe, any more than I do, that European security is possible in the foreseeable future without the support of the United States. One reason is that it will be many years before the Community generates sufficient central authority to become a great power on its own, and maybe it never will. Meanwhile, its influence will depend on the degree of cohesion it can develop. This will depend not only on economic integration but also on the development of common international and defence policies Now that there are no disturbing personalities on the scene, this should be rather less difficult.
At the end of a long period of peace—we have already had in Europe 27 years—with growing world co-operation in trade and technology and such matters as pollution, Europe, protected by the nuclear peace of the great Powers. should be able to exercise a powerful influence in the world—not, as some people once thought and some may still claim, as an alternative to adequate military defence but as a result of its success. If this situation is recognised by the Soviet Union, it may be that for the first time in history Europe can look forward to permanent peace and civilised cooperation.
The increasing policy formation by the central organisations and the enlargement of the field of policy not subject to the unanimity rule imply a greater degree of parliamentary scrutiny and control. I am glad that a great deal of today's debate has been devoted to discussing how we can develop machinery of control by a European Parliament, the procedures for the direct election of its members, and their relations to our own Parliament.
It is essential also that we ensure—this will be a Government responsibility—adequate debate of matters within the competence of the Community organs if we are to maintain an informed public opinion and interest. We must not let this slip away into occasional debates of a rather boring character. Community affairs will play a substantial part in our lives, and it is important that we maintain an interest in them in this House.
On a slightly less friendly note to the Treasury Bench, I must make some remarks addressed to the Prime Minister. If our entry really is the greatest issue for this Parliament, as I suppose he believes, he has gone about it in the most extraordinary way. To go into Europe we needed the strength to defend our own interests and to help to develop Europe. We needed a united, confident nation. As my right hon. Friend the Member for East Ham, South (Mr. Oram) said, what we have had instead is unfair and divisive policies that have produced a nation which is, by common consent, more divided and dispirited than at any time since the war.
Entering the Community is not just a technical, legal or constitutional matter. With the right leadership, it could be the opportunity to play a great part in world developments which would bring the greatest benefits to our people, their children and their grandchildren.

7.48 p.m.

Mr. Charles Fletcher-Cooke: There has been a great deal of discussion about whether the vote we shall take on Thursday night is a vote of principle. To my mind, it clearly is. It is not a new principle. It is the same old principle—whether it is worth a curtailment of our powers of initiative in exchange for the economic benefits that entry will give. It is the same old principle that was debated at length in the last Parliament, has been debated in July and October in this Parliament and is now to be debated again. But there is no change in the factors.
The hon. Member for East Ham, South (Mr. Oram) tried to explain why he will vote differently on Thursday from the way he voted on 28th October. He did not suggest that there was any difference in the principles or that the Bill would not carry out a promise or threat, which-

ever way one likes to look at it, given in previous White Papers. He said that the pressures of six or seven conflicting loyalties had been brought to bear and that he did not want to give the present Conservative Government great powers because since October they had shown themselves too unworthy to have them.
Taking the last point first, the complaint against the Bill is not that it gives us great powers but that it takes powers away. We are constantly told that powers will be going from London to Brussels. If the hon. Gentleman does not like the present Government, the more powers that are taken from us the more he should be delighted. It is clear that this is a question of principle. It is no good pretending otherwise. The principle is well known and it is the price we have to pay.
My right hon. and learned Friend the Chancellor of the Duchy of Lancaster said that there was nothing in the Bill that abridged the sovereignty of Parliament, and there is a case for that proposition. The question is not so much whether this Parliament can subsequently pass whatever legislation it likes or whether the Royal Prerogative is somewhat diminished by this Measure, as it clearly is by the words that were first uttered by my right hon. and learned Friend in introducing the Bill. For example, the right of veto is undoubtedly affected by the obligations that we are undertaking.
The real question is what the courts will do if a situation arises in which subsequent legislation of this Parliament appears to conflict with the regulations of the Council or decisions of the European Court.
I find in this Bill no guidance to the courts on that important point. There is nothing wrong with the Bill so far as it goes, but it does not go far enough in that it does not give the courts guidance in what will be the crucial matter, indeed in what has already been a crucial matter in the courts of the Six. There is nothing in the Bill which tells the High Court what it is to do if legislation subsequent to our entry into the Community or Statutory Instruments are passed which the courts think conflict with the regulations or the Treaty of the Six.
The courts should be given this guidance because the problem has vexed


the courts of the existing Member States. The courts of the different countries have operated in different ways. It is not enough, therefore, to say—as I am sure the Government will say; perhaps the Solicitor-General will say it on Thursday—that we must see how we get along—solvitur ab ambulando. That sort of pragmatic approach which Governments are apt to adopt is not good enough in view of the way this problem has afflicted the courts of the Six.
For example, in Italy there has been the case of Costa. There was a dispute as to whether the manner in which the Italian Government had nationalised their electricity undertaking was or was not in breach of the treaty or a decision of the European Court. Although the constitutional court of Italy decided that Mr. Costa must pay his electricity bill and that the Measure which the Italian Government had passed was constitutional, nevertheless a puisne judge in Milan decided that it was not. This illustrates the need to give guidance to the courts rather than to insist on complete sovereignty for Parliament. Despite the decision of the constitutional court of Italy and of the Italian Government, Mr. Costa need not pay his electricity bill and he has never paid it. He therefore defied all the forces of the Italian State, judicial, executive and legislative, with success.
In Belguim the courts and all the organs of Government insisted on imposing a tax on the import of milk and that country's courts upheld the Belgian proposition, until that awful day when the European Court said that the tax was totally unconstitutional and in conflict with a decision of the Six. The Belgian Government have had to pay back billions of Belgian francs to those who had already paid the tax.
Then there was the case of Algerian semolina, to which I have referred before. The French insisted on allowing the free entry of this and other products from Algeria into France contrary to the rulings of the Commission and the European Court. Typically enough, the French courts upheld the national rather than the international decision, and there it rests.
We therefore have in bold relief three cases of such conflict. The courts of England should be given guidance in the

Bill as to which way they are to behave if such a situation were to arise here. But I find no such guidance anywhere in the Measure. It is assumed that the legislature and Statutory Instruments will always continue in harmony with Brussels and Luxembourg. Even by inadvertence that may not occur, yet no guidance is given to the courts on that point.
Indeed, there are in some cases suspicions of the suggestion that this Parliament will still be able more or less to do what it likes. I am not taking an extreme position. Sometimes it is suggested that we shall be able to with, draw altogether and tear up the treaty. That is clearly within the competence of this Parliament, though in my view it would not be desirable to do anything of the sort. But that is not what I am now talking about. I am considering the situation where, although we seek to remain a member—or shall we say not daring to leave—legislation is passed which conflicts with European requirements, particularly in fiscal matters. Suspicions are aroused that although we are paying lip service to the price that we must pay, the Bill does not go as far as we are in duty bound to go.
For example, in the famous Clause 2(2) about which we have heard so much we find that when we are obliged to make provisions for implementing Community obligations the word "may" is used. We read:
any designated Minister or department may by regulations
do this, that and the other. In subsection 2(b) we read that
the person entrusted with the power or duty may have regard to the objects of the Communities and to any such obligation or rights as aforesaid".
There is no option. It is not "may" but "shall". The same is true of Clause 5(7). There are in such matters, for example, small indications in the repeal Schedules that repeals of the existing legislation shall take effect from such date as the Secretary of State "may" by order appoint. He has very little option in the matter. He must order such repeals to take effect on either 1st January, 1973, or such later date as the transitional provisions allow, otherwise we are in breach. Therefore, I am not persuaded in my own mind that the necessary comprehensiveness or clarity is to be found in the Bill as regards these directions to the courts.
There is another mater which causes some trouble to lawyers, and this after all is the lawyers' day. In July and October last we had the economists' beanfeast when they were telling us about the advantages or disadvantages of joining, but this is a legal matter and, therefore, we should examine the legal consequences and the legal gaps very seriously. My right hon. and learned Friend referred to Clause 3(2), by which
Judicial notice shall be taken of the Treaties, of the Official Journal of the Communities and of any decision of, or expression of opinion by, the European Court…as aforesaid.
That is the meaning of the treaty's regulations and directives—judicial notice shall be taken. My right hon. and learned Friend said that this imported the jurisprudence of Europe into the British legal system.
"Jurisprudence" is a big, grand, Oxford word not used at the university from which my right hon. and learned Friend and I came, and I do not know what, in its vagueness, it means in this connection. Does it mean, for example, that the courts of law in England do not use the system of interpretation of Statutes and Statutory Instruments they at present use when construing a European regulation? The method of construction of legislation in this country has grown up through the centuries. It is very large in volume and great learned works are written about it, and it has at present a certain artificial character.
For example, as hon. and learned Members, and perhaps others, may know, one may not look at the travaux preparatoires. One may not cite speeches made in the course of legislation. One may not, except with great exception, look at the White Paper which came before the Bill. One way not try to gather the intention of Parliament from what was said in Parliament at the time. This is a fairly rigid rule. Some object to it, others believe it means that litigation is much shorter than it would be if one were allowed to bring in this great mass of stuff. Whether that is right or wrong I do not know, and for the moment I do not care.
What I care about is whether in interpreting these many regulations and treaties the courts in England have to adopt the English method of interpreta-

tion or to adopt a continental method of interpretation; that is to say, do they use a different instrument? Do they use the European instrument—because they are quite untrained to do so at present—for construing European documents? One would have thought they would have to do so since there is an appeal, although that is not quite the right word, to Luxembourg. There is a provision, and indeed a mandatory provision, in the case of courts of appeal by which in case of difficulty, or if the matter is raised by either of the parties before the court, the matter goes before the European Court. There, of course, the method of interpretation will be quite different from ours.
One would think, therefore, that the lower courts in this country would be bound to employ the European method of interpretation, which is quite different from ours and in which they have no training. This may sound a small point but to my mind it illustrates the lack of guidance which courts are to be given in future when they have actually to do the task which this House will be imposing upon them by passing the Bill. Therefore, although the Bill is a very neat and artistic job, to my mind it begs a very big question: the question of what the court is to do in the case of such conflict, that conflict being whether legislation subsequent to our entry into Europe, legislation from these Houses of Parliament, is to be preferred by the judge if he nevertheless believes that it conflicts with a European regulation. I hope I may be given some aid and comfort in my worry on that point.
It is a big matter, so big that one wonders whether quite enough attention has been made to the imminence of this. Again, one can only instance this from one's own small researches. As Members of this House may know, I am very interested in competition policy. I have with me one of the 42 volumes of secondary legislation, that on competition policy, and I have been reading the legislation on that because it is one of the things that comes into force in the law of England immediately. There is virtually no interim period. But if we are legislating for England in the course of the Bill, as we are, this must be up to date; and even in this volume, which is part IV of the European Communities secondary legislation, there is no copy, nor is any copy available, for example,


of Regulation 2821/71 which was made two months ago. It is not possible to find an English text of it. There is a French text but no English text is available.
I know the enormous mechanical difficulty in doing what the Government seek to do but if it is to be translated into English law and applicable in England in a very short time we really must have up-to-date translations as these regulations are issued so that we know in what form we are altering the law of England.

Mr. W. Baxter: I am listening with great attention and interest to what the hon. and learned Gentleman has said. I wonder whether he would be prepared to give way so that we could have an immediate reply from the Front Bench to the very important point he has raised.

Mr. Fletcher-Cooke: I should be very grateful for this flattery from the hon. Member but I think it is rather a Greek gift. I believe I said in the course of my opening remarks that I hoped my hon. and learned Friend the Solicitor-General would reply to some of the things I have been saying because, as we know, he has been responsible for the brilliant condensation of the Bill which we all admire. I should have thought he, if anybody—even with the great respect I have for my hon. Friend the Minister of State, Treasury, whose brain in all fields is that of a polymath—might be a suitable respondent.

The Minister of State, Treasury (Mr. Terence Higgins): I am grateful to my hon. and learned Friend. He said earlier that the economists' beanfeast was over last October. Therefore, I hesitate to intervene on a point of substance. I assure him that my hon. and learned Friend the Solicitor-General will have his attention drawn to my hon. and learned Friend's remarks.

Mr. Fletcher-Cooke: I am much obliged to my hon. Friend. I could go on with these details, which are important although they may sound very small.
The only final matter I should like to mention is that it seems to me that when we are putting into the law of England these 42 volumes—because that is what we are doing—the majority of them are

very small but some of them are very big. Perhaps the biggest one, and the one that is hardly ever mentioned in these debates, is that relating to the right of establishment and residence of the nationals of the various member States of the Community. The word "national" appears throughout this legislation, for legislation it is, both in the treaty and in many following regulations. I instance the regulations of 25th February, 1964, and 22nd October, 1968, which provide, apparently in the widest terms, that all member States have to provide the right of establishment and residence for the nationals of other member States, not only for those who have already come and taken up occupations but for those who wish to provide services.
As is well known—I do not wish to tread on any toes—the word "national" is very difficult to give a meaning to in our nationality law because, owing to the peculiarities of British law, we have never really defined what is meant by "United Kingdom national". We know what it is not; it is not necessarily someone who has a United Kingdom passport. But what it is we do not know. Before we put this very severe legislation into the law of England, which is what the Bill will do, we must know the answer to that sort of point. What exactly is meant by a "national of the United Kingdom" when we are passing legislation which gives not only a United Kingdom national the right to go to France or Germany, set up business there, and, if he wishes to provide services, the rights of residents there, but also gives to nationals of other countries the right to come here? The former is, of course, much the harder of the two, for reasons of difficulty of definition which I have already given.
I hope that during this debate—or if not in this debate, during the Committee stage—the Government will devote a long time to explaining exactly not merely what obligations we are undertaking but what opportunities we may insist upon, and for whom, because unless this is done, much as I approve of the price we are paying—I think that we should pay it in general terms of entry into the Community—I do not think it has been sufficiently spelt out. Let there be no hypocrisy, no misunderstanding and no vagueness. Then, and only then, no one can subsequently allot blame.

8.13 p.m.

Sir Arthur Irvine: Vast changes are being proposed in our law by this Bill. I feel that the scale and extent of those changes are perhaps still not sufficiently recognised. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) indicated that guidance was not given by the Bill as to what English courts would do and what English law would be in the event of there being a conflict between existing English law and the Community law. I think that on that point precisely the effect of the Bill is clear. I think the effect is that the Community law will prevail. That is how I interpret it.
I think that, in considering the Treaties of Accession and the decisions in principle that were made as to the relation which should exist between Britain and the Community, the better view was that the courts of law in this country would be very reluctant to proceed on the basis of drawing implications as to what was intended to be the state of the law in England as a consequence of the decision to accede to the treaties and to enter into arrangements with other Powers. Although I regard the Bill as having a great number of faults, I think it possesses undoubtedly a kind of ghastly clarity. My reading of it leads me to the conclusion that in the kind of conflict to which the hon. and learned Gentleman referred the effect of the Bill is that the Community law should prevail.

Mr. Fletcher-Cooke: That was not the conflict I posed. In conflict between existing English law and Community law, I have no doubt that our courts would prefer the Community law. I was concerned with future English legislation, made with all the knowledge of Community law, which therefore might be held to be deliberately against Community law. What would they do then?

Sir A. Irvine: My inclination is to think that the effect of the Bill, so far as it goes—and it goes pretty far—is to provide that in all instances of conflict the Community law shall prevail. Of course, the expectation may be that in future the English law will go out of its way not to conflict with the Community law. Be that as it may, the effect of the Bill seems to be to impose the supremacy of Community law. Of course, it is that which, for my part, I am inclined to dislike, and

dislike very strongly, because I value so highly the great inheritance of legal principle and English law which we have.
I have said that I believe that the scale and extent of the changes proposed are perhaps not fully recognised. First, there are the provisions of the Community law which we bind ourselves under this Bill to make the law of the United Kingdom without further enactment. These are the directly-applicable Community provisions referred to by the Chancellor of the Duchy of Lancaster. I suggest to the House that we should ask what is the effect of these directly-applicable provisions upon our existing law? What encroachments do they make upon the common law? That is a matter of tremendous importance to the House. The answer is that no one knows. There may be someone somewhere who knows, but he is a rare and recondite personality because we have heard of 1,500 regulations—provisions galore—and it is almost unthinkable that they should not involve here and there very substantial inroads and encroachments upon the common law.
The fact is that the House does not know—and it is fair and accurate to say so—what is the scale of the encroachments upon the common law entailed in these directly applicable Community provisions which are to become part of the law of England without further enactment. It is obviously a strident innovation in our legislative method to treat the common law in this way. I say without hesitation that we can easily underestimate the scale of what is taking place.
In passing, I am sceptical about the whole concept of the directly applicable provisions. I should be interested if the Government could assure us that there is no overlap between the matters referred to in Schedule 2 of the Bill—taxation changes, the retrospective matters and changes in the criminal law—and the directly applicable provisions. The Minister of State, Treasury will appreciate the importance of that because the Schedule purports to say that under the headings that are set out in the Schedule the rights of the British Parliament by way of Act of Parliament and our ordinary legislative proposals are preserved, and indeed emphasised, whereas the effect of Clause 2 is to say that the Community law will prevail without further enactment in this Parliament. Quite clearly, an absurdly


complex and unsatisfactory situation would arise if there were any overlap between the two, but I am rather inclined to think that there probably is. I believe the category of the directly applicable provision, as it has been described, is a rather contrived and artificial category.
I agree with the criticisms that have been levelled against the method that this Bill adopts to impose upon us this huge new body of inchoate, unidentified and not understood law. A curious feature of the matter is that Article 189 of the Treaty of Rome went out of its way, stringent though it is, to allow a certain latitude to each member State as to choice of form and methods whereby the directives of the Community's authorities were to be implemented. I appreciate that the treaty draws a distinction between directives on the one hand and regulations on the other. Even so, given this latitude which the Treaty of Rome affords us in the choice of the forms and method, this Bill resorts to the most authoritarian and dictatorial method imaginable because it provides at one fell swoop—quite unnecessarily, I think—in Clause 2 that all the rights, powers and liabilities, obligations and restrictions referred to in the Clause are to become part of the law of the United Kingdom.
In other words, it adopts a method of spurning the opportunity which Article 189 of the treaty afforded to choose a method which would give the House a reasonable opportunity for considering what the content of Community law is and what, by the same reasoning, is the new law that we are invited to adopt. Clause 2 could have provided—it does not, but it could—that within a given time of the date of any directive of the authorities of the Community the substance of that directive should be incorporated into English law by Act of Parliament or Order in Council or, in appropriate instances, by regulation. That would have made it possible for the directives to receive a much closer and more particular specific consideration than the present proposal offers. Instead, a sledgehammer treatment of the whole matter has been adopted. Whether this is because of the need to shorten the Bill for reasons of parliamentary convenience I know not, but there has been resort to a much more draconian and automatic pro-

cess of application of community law than even the Treaty of Rome requires.
I still think that, although the matters I have referred to are important, the question that must be uppermost in the minds of most of us on what on any view is an historic occasion is what is to happen in the new dispensation to the common law of England. There are no safeguards for that; there is no safeguard in Schedule 2 or any other Schedule for the common law. Let the House, for Heaven's sake, recognise the solemn seriousness of that circumstance to which I have drawn attention. The plain truth is that the common law of England, as I understand this Bill, goes by the board the moment it is found to be in conflict with Community law. Will any Government spokesman deny that this is so, or confirm that this is so?
Of course, I know that it will be said that the common law broadly covers a different field from the field of concern of the law of the Community. That will be said; but if even a formal power is conferred upon some authority beyond our shores to impose restrictions upon the whole body of our common law, that I should have thought was the gravest possible matter for this House to consider. The common law is the very foundation of our liberties. The Royal Prerogative is that pre-eminence which the Sovereign enjoys over and above all other persons by virtue of the common law. The special dignities, the privileges and the powers of the Crown are allowed to it by the common law. It would be a gross betrayal of its responsibilities by this House if one of its own Bills conferred upon an authority such as the European Community the power to diminish the body of English common law.
It is true, of course, that the common law has in the minds of many people been eroded and encroached upon by a great mass of delegated legislation and by Government Departments already. That has been a subject of complaint over a long period of years. At least, however, these impositions and encroachments were effected by Parliament itself, and the powers Parliament gave in that connection Parliament could take away.
It is a most astonishing thing that the Conservative Party in 1972 should appear to be ready to regard with such restraint and acquiescence this formal


abandonment of the common law and all that it has meant in our history. For us on this side of the House also the importance of the common law cannot possibly be overstated. Perhaps our main point of difference from hon. and right hon. Gentlemen opposite is the need which we feel, for the purposes of social justice and equality, better planning, and the rest, for a greater rather than a less degree of State interference in affairs. As a Socialist Member of the House I would readily acknowledge as a concomitant of that need that the common law should be carefully sustained and preserved as a defence against possible encroachments on liberty by the State. It is wholly consistent and compatible with our outlook on this side to say that we want more extensive State power and at the same time the bulwark of the common law to protect society from excess of power whether from the State or from anyone else.
So all of us, whatever our opinions may be on these matters, can surely join in a tribute to the common law and all it stands for, and I would suggest to the House that it should consider with the greatest gravity the provisions of a Bill which, as I understand it, would give to an authority outside the realm power and capacity to diminish that precious and invaluable heritage.

8.32 p.m.

Mr. John Loveridge: It is interesting to hear the right hon. and learned Gentleman the Member for Liverpool, Edge Hill (Sir A. Irvine) plead for the common law, but, as he himself has said, Governments have already eroded that common law by Statute and by codification. It is indeed possible to envisage that this House may well find methods for the examination of new proposals coming forward from Europe which would give us even better opportunities than we have had in the past to look at further possible erosions of the common law. My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) mentioned the need for a citizenship Act, and I think many of us sympathise with his feelings about that.
Earlier, the hon. Member for Edmonton (Mr. Albu) spoke o the vital importance of having a common international

defence policy. Here, Britain is particularly fitted, in entering the Common Market, to bring together more closely America, Europe and the under-developed world, including the Commonwealth. There our influence can be for peace.
So I welcome today this European Communities Bill. It will change the history of nations. The history of Europe has been one of trade wars interrupted by wars of blood, but today we see the Six nations working together within the Common Market for their common good. The results of this have been that they have been able to sell more of their goods to one another. Their standards of life have risen, and their average earnings per head, formerly behind our own, are now well ahead of ours. They have caught up with and surpassed us in wealth per head. At the same time, they enjoy longer holidays and put away more money for their social services than we do.
We for our part have seen our trading pattern become increasingly more difficult. Old preferences for our goods have shrunk as Commonwealth countries have bargained for trade outlets in richer markets. Now the United States has felt forced to raise barriers against imports, and may do so yet again. Its golden hoard of money that for so long serviced the growth of world trade has run down. As a result, the Americans have been obliged to take action to save their balance of paymens and the remainder of that hoard. At the same time Japanese exports increasingly threaten ever more severe competition with our own.
We might manage alone, but how much easier it will be within the new grouping in Europe. There we can have a guaranteed market on a scale that will allow our manufacturing exporters longer production runs, and therefore more profitable runs. Thus, we shall even find it easier to trade with the whole world from the improved base of a larger home market.
A great deal has been said about the price of food. If we look a decade ahead we can see that European farm prices will be limited because of the gains in productivity that can be foreseen. They will move into an era of high output, and of mechanised farming, and we in Britain can take advantage of that as exporters of increasing quantities of farm machinery. We can help speed up


the modern, cheap farming methods which Europe needs and at the same time brings profits to our own traders.
The Six are substantial importers of food. Their long-term interests must be to keep down the price of these imports. Those interests are the same as ours. Europe needs us just as much as we need Europe. It wants a full share of the most advanced industries of the future. So do we. In the past we have been grateful for the outpouring of American capital. It is not though in our interests, nor in the interests of the European nations that the greatest and fastest-growing industries of the future should be dominated by one nation. The new large market will make it possible for us, with other Europeans, to finance these forward-looking industries.
This will bring us the benefit of enormous numbers of new jobs in the advanced industries and on the boundaries of those industries. New component industries will grow up. Where will the businesses grow? They will grow here, because with the present tariff barriers we can already see the temptation that many firms experience to put their capital in Europe so that they can operate in Europe behind the tariff wall. At the moment we have to sell goods there across this tariff barrier. How much easier until we enter, therefore, to move the capital into Europe.

Mr. W. Baxter: That point of view was put forth on a previous occasion when this country set up the E.F.T.A. Agreement. It was said that the arrangement would give us a market of over 50 million people and an opportunity to expand our industries to become competitive with the Common Market. That argument has not been proved; why should we believe it now?

Mr. Loveridge: One difficulty was that for six years the hon. Members right hon. Friend was in charge.
I will give a specific example from my own constituency of how this could come about. The Ford Foundry is able to sell substantial numbers of crankshafts to Germany across a price barrier and a tariff barrier. If the tariff is taken off, how much simpler it will be to sell at a higher profit and so benefit the nation?

Mr. Baxter: It is being argued in certain circles that we should go towards a

free trade world. If that became a reality, would it nulify the hon. Member's desire to become a part of the Common Market?

Mr. Loveridge: No, Sir, it would not. We should be much better enabled to negotiate for what is described as a free trade world from within the greater strength of a larger regional grouping than we should on our own.
I turn now to how the financing can best be achieved. To service the growth of trade we need to encourage currency reform. The lack of a regional currency within Europe led to the growth of the Eurodollar. Europe has also used the dollar standard as its unit of account. As the dollar is no longer as secure as it was, that practice is becoming of doubtful advantage.
We need some safe alternative to the outpouring of American gold that has financed world trade. The dollar can never serve as safely in the future as it has in the past. We must, therefore, welcome the initiative towards new world reserves, but these may not quickly gain full world-wide acceptance because they are based essentially upon paper and not upon convertability into gold, and their credibility relies on trust between nations.
Will the Government consider whether, within the context of our joining Europe, there is room for a new monetary rôle? Much has been said in our debates about there being more "stop" than we like in the "stop-go" policy. We can all see the danger of the balance of payments becoming difficult if our growth is as we expect it to be. Trading patterns are hard to quantify in advance, but cannot we eliminate the danger of a severe strain in our balance of payments, caused by growth after we join Europe, by encouraging a common balance of payments boundary round the nations of the new market? Could we not at the same time consider a possible new reserve rôle for the strong currencies of Europe in association with the franc area and the sterling area? There is no need for this concept to cut across the growth and the building up of a world reserve. It could be complementary to it.
This is looking some way ahead, but we need to plan now if we are to develop investments, to create new jobs and to enable factories to take advantage of retraining programmes. All this may endanger our balance of payments if we


do not come to some sort of terms with our European neighbours after we join.
To sum up, I have said that the old patterns of trade have become more difficult and that we should seize the chance of entering a large and secure market for our goods. Even now we should be looking beyond the immediate treaty. The currency question is one of the most vital British interests at which we should look in the future and should be the subject of further negotiations as soon as possible. It is second in importance only to the need to strengthen the alliance within N.A.T.O. itself. The opponents of entry offer us no great alternative. They would leave us trading on our own in a dangerous world. Greatness is not to be found in doubting fears, but it can be found in taking the opportunity to enter this new market in which we can sell our goods to the benefit of us all. We can also through the Common Market bring closer together the comity of nations. If we join Europe, I feel that we shall strengthen not only our economy but our safety in the world.

8.47 p.m.

Mr. David Clark: I find myself in almost complete disagreement with the hon. Member for Horn-church (Mr. Loveridge), except on one point when he indicated that in the near future our balance of payments might be weakened.
The hon. Gentleman has put the case for the Common Market in the way in which it has been put on platforms throughout the country. He believes in the way in which it is put and he put his case honestly. However, has he not read the report by M. Coppé, the commissioner in charge of social policy in the E.E.C.? Has he not read that unemployment in the Community has become worse than it has been for years? When the hon. Gentleman talks of a rosy future and of an economic boom, has he not read about the conditions set out in the Official Bulletin of the European Communities Volume 4, No. 2? Speaking of their own activities they say that
the boom conditions which had prevailed in the Community in recent years had passed their peak. The growth of economic activity had lost momentum against the international business background of slower growth and a certain easing in international markets. But

this tendency had not been reflected in the trend of costs and prices, whose rapid rise remained the most disturbing feature of the economic trend in the Community.
Whenever one looks at economic reports today one finds that, as compared with the golden future which was forecast for the Community in the 1960s, the bubble has now burst. The argument put forward by the hon. Gentleman does not hold much water.

Mr. Loveridge: Does the hon. Gentleman think that smaller production lines with smaller markets would help to reduce prices?

Mr. Clark: I do not entirely accept the hon. Gentleman's point, and he links his point with the aspect of a larger market. He is falling into the fallacy that we shall have a larger duty-free access to other countries. What we are seeing in the E.E.C. is the erection of tariff walls against some of the third countries which in many cases comprise our great markets. I would not accept the hon. Gentleman's premise.

Mr. Hugh Dykes: Will the hon. Gentleman give way.

Mr. Clark: No. A number of hon. Members wish to speak. I should prefer to make my few points and then allow others to take part in the debate.
In opening the debate, the Chancellor of the Duchy of Lancaster took credit and praise for the fact that his Bill was a short, succinct and concise piece of legislation. That is a fairly true description of it. Indeed, I cannot visualise any other document having a greater effect on a nation being put forward in such a succint manner. The only document which bears any similarity to it is Machiavelli's "The Prince". From my reading of that, it appears that the right hon. and learned Gentleman has adopted many of the points advocated by Machiavelli in putting forward the Government's case for Britain's entry. However, perhaps we should not be surprised because it appears that, by using legal jargon and very clever legal wording, the right hon. and learned Gentleman has got himself off a parliamentary hook. In effect, it will be very difficult for those who have grave doubts about the Common Market to raise many of the important points of issue which should by right be raised in this Chamber.
That really is what this debate is about. By this legislation the Government are taking away some of the basic liberties and rights of the British people. The Bill is a short-cut Measure. In taking this short cut, the right hon. and learned Gentleman has weakened certain of the liberties which we could have maintained even within the Community rules. I find that very regrettable.
The present Government's handling of this issue has not only caused serious damage to our democratic institutions. It has damaged our democratic way of life. It was said by the right hon. and learned Gentleman earlier that democracy is not simply institutions but a feeling for institutions and a feeling that a system should work. There is a strong feeling in the country at the moment that the Government are ignoring the will of the people. I remember only yesterday, when we debated the emergency regulations, how a number of right hon. and hon. Gentlemen opposite made the point that public opinion would always win and how the Government were right to take those emergency powers since public opinion wanted such action. I wish that right hon. and hon. Gentlemen opposite would pay a little more attention to public opinion when it comes to the Common Market.
The right hon. and learned Gentleman has dealt himself and our democratic system a grave blow, not only by the way he has taken us into the Common Market but by the way he has presented his information and stifled the means by which we in Parliament might discuss what is probably the most paramount of all legislation to come before this House since the end of the war.
Perhaps I might take one point from the right hon. and learned Gentleman's speech. He believes—and he has maintained this position today—in our entry into the E.E.C. and that if the Bill is passed it does not mean that there will be any surrender of sovereignty.

Mr. Rippon: I said that there would be no essential surrender of sovereignty, and successive speakers on both sides of the House have agreed that there is no essential surrender of sovereignty. Indeed, the Leader of the Opposition is on record as putting it much better than I could, as is Lord Gardiner.

Mr. Clark: I take the point made by the right hon. and learned Gentleman. Perhaps I misquoted him. But even taking his words "no essential surrender of sovereignty", it seems to me that there is an essential surrender of sovereignty. The supremacy of Parliament has been waning for years. The power of the bureaucratic machine has caused that to happen. But the basic point about entry into the E.E.C. is that we shall be entering an even large bureaucratic machine and, even if the doctrine of the supremacy of Parliament once had some reality, it will apply no longer once we enter the E.E.C. It will be a great tragedy if that is so. As the right hon. and learned Gentleman said, Community law takes precedence.
Apart from my general condemnation, I should like to refer to two specific Clauses. Clause 2 is obviously the most powerful Clause in the Bill. It entails a great many obligations on this country. It may be, and obviously is, the opinion of certain right hon. and hon. Gentlemen that this is a fair price to pay, but others of us feel that the price is too great.
I should like to take this opportunity to pose some questions which arise on certain Clauses. As I read the Bill—this is stated in the Explanatory Memorandum—payments will have to be made across the frontiers for certain social security benefits. Will the Minister who is to reply to the debate point out that it is an obligation on this country to be responsible for the medical care of the dependants of workers from E.E.C. countries who are in this country? This is of paramount importance. It is not widely known in this country. I raise the point specifically because the logic behind this regulation is that industry should be responsible for social security.
I am particularly worried about certain of our institutions. For example, although the National Health Service is partly recompensed out of contributions, 90 per cent. of the cost comes from general taxation. If we enter the Common Market, will there be direct charges for medical services in this country? I pose this question in all sincerity because this view has been mooted generally of late by certain authoritative people.
Dr. Elston Grey-Turner, Deputy Secretary of the British Medical Association.


Secretary of the B.M.A. Common Market Committee and official British observer to the Common Market Committee of General Practitioners, said in Luxembourg on 5th December, 1971, that our National Health Service would have to change as
members States would harmonise their social security systems. If Britain enters the European Economic Community, it is likely that in the long-term the system by which we finance our National Health Service will move closer to the systems that you have in Europe, which may involve many direct charges for medical services and much less reliance upon taxation to pay for their cost.
He was reported as going on to make the point that
Fee-paying would be politically unpopular with the British public but, on his reading of the Treaty of Rome, the decision would conveniently be taken away from Westminster.
This comes back to the theme which I am trying to develop: that the Bill will take out of the control of this House many of the basic rights which we cherish and which the general public appreciate highly. This will cause great consternation.
Clause 6 of the Bill provides for the setting up of an Intervention Board for Agricultural Produce so that we can operate the common agricultural policy. It will be no surprise to right hon. and hon. Gentlemen opposite that we on this side of the House generally abhor the C.A.P. Of late, however, there have been some developments in this sphere about which we have not been able to get facts. For example, we in this country have a very balanced system of hill farming. We have divided our hills among agriculture, recreation, forestry and grouse shooting. This is a careful and probably very good balance, but all this has changed.
The Mansholt Plan estimates that 12½ million acres within the Six must be taken out of agriculture if the C.A.P. is to operate efficiently, and that 10 million acres of that should be afforested. The Vedal Commission has recommended that in France alone 30 million acres must he taken out of acriculture and afforested. Obviously, if the regulations which we are adopting in the Bill were applied to Britain, the whole pattern of the landscape in our upland areas could change dramatically.
The upland areas of this country are generally also of outstanding natural beauty, much of which depends on the pattern of land use. Many of these areas are national parks. By our adopting the Bill, our farmers will be forced out, vast areas will be afforested and the balance for which we have fought for so long will disappear. Yet these decisions will be taken not by this House but elsewhere because Britain has agreed to the Bill. Because we believe that this is an essential surrender of sovereignty, we shall vote against the Bill.

9.2 p.m.

Mr. Hugh Dykes: It would be presumptuous of me, as a Member from the 1970 intake, to try to comment in more detail on some of the statements about the effect on Parliament, parliamentary procedures and behaviour, conventions and tradition, as a result of entry. Nor should I get too involved in the discussion during which hon. and learned Gentlemen brought us back closely to the language of the Bill, before which the debate had veered away from the Bill into a more general debate on arguments for and against entry.
I am one of those on this side—and on the other side of the House, although they have not yet stated their position—who welcome the Bill because it is logical—not in the sense that it will be easy for the Government to get it through the House, but because it performs its own logic in two respects. It completes the long-attenuated, long-drawn-out and often exhausting process—for the House and the country—of the ensemble debate on joining the Community, which began many years ago when the Labour Party was in Government and which has been consolidated and completed under this Government. It is logical in that sense and also because of its own brevity and concision.
I should like to add my congratulations to the Chancellor of the Duchy and his colleagues, especially his legal colleagues, for the way in which this Bill has been constructed and presented to the House. Despite the fact that there were obviously indications at one time or another, especially last year, that a fairly lengthy Bill could, for clear reasons, be expected, I always thought it was a figment of journalistic imagination, unfortunately encouraged by hon.


Members opposite for their reasons, to suggest that we should have a truly mammoth Bill of massive proportions, of the 500 to 1,000 Clause variety, so often featured in headlines when the Common Market debate was being processed at various stages.
But it seems that in the Bill we balance the conflict and the considerations of having a Bill sufficiently detailed to appease and satisfy, dependent upon their views, those hon. Members on both sides of the House in considering the merits of the arguments underlying the Bill, with the need for the Bill to be expedited in an acceptable and logical way in the House. In other words, my contention is that this long and great debate has gone on for so long now that, with the decision in principle having been made last autumn in the House, and with the subsequent debate which took place last month on the Treaty of Accession and all the rest of it, there has been inculcated in the British public, irrespective of their central views on the merits of the Common Market and whether they are in favour of entry, a feeling that Parliament should now get on with the job of studying and processing—processing obviously if one is in favour of it—in a logical sense, and dealing with the Bill.
For hon. Members opposite to have suggested earlier that the brevity of the Bill will deprive them and, I suppose, some of my hon. Friends, of the chance of picking the Bill to pieces of they wish, which they have every right to do, is complete nonsense and a distortion of the powers, function and quality of Parliament. That is why when the Bill goes into Committee on the floor of the House for the line by line and word by word examination—particularly of Clause 2(4), which, unfortunately, is totally incomprehensible to me—an almost syllable by syllable analysis will be permitted to all hon. Members. That is an obligation which the Government have met fully.
Therefore, I do not share the arguments of the right hon. Member for Stepney (Mr. Shore), who complained in those terms. One of the tragedies of the whole Common Market issue has been the volte farce—with an "a" and an "r" rather than an "a" alone—of some members of the Opposition. I hasten to

add that in this particular case I am refering not to the right hon. Member for Stepney but to some of his colleagues who have apparently not yet even adequately explained their change of mind on this issue. That is why my hon. Friends are entitled to logical and reasonable explanations of this change of view, or, failing that, perhaps, to ask for the support of some hon. Members opposite for the Bill as it is gradually processed through the House. At this stage that is not provocative or unreasonable. It flows from what was said earlier last year, more recently, and in the debate on the principle of entry which took place last Autumn.
I come briefly to the argument enunciated on several occasions about signing away the rights of this country and Parliament to the Community. It has to be recognised that there are a variety of Community instruments and there are generic differences between them. It should also be recognised that the Bill is perfectly reasonable. It is not exactly an enabling Bill; that would be the wrong use of the word. But it is a Bill with precedents on the signing of treaties by this Parliament and Governments representing the people. We shall be acceding to instruments of the Community and the treaties. At the same time we shall be subjecting this country to a range of different instruments, some of which are binding in a full legal sense, others of which are binding in a sense as far as the ends of the objectives can be determined, others of which are decisions which are selectively binding or directional, as so called, and others of which are recommendations or opinions which are not binding.
So the sum total of the process is far less sinister than many Labour hon. Members would suggest. They have tried to unnerve other hon. Members and the nation by the sinister implications of something the House should have been prepared to do anyway. The implications of our accession to the Treaty of Rome and the other treaties have long been recognised.
I shall welcome what will undoubtedly be a lengthy Committee stage. I also add my words to the welcome accorded earlier by one or two hon. Members to the proposal of my right hon. and learned


Friend the Chancellor of the Duchy of Lancaster to set up the ad hoc Joint Committee. It will go a long way to remove what might have been the House's continuing unease about Community instruments and how they would be dealt with. It is a proposal that I believe will be satisfactory in the extreme.
I turn next to two points that move away from the Bill but are indirectly related to it. Bearing in mind arguments about a slowdown in the Community's economic performance, of which there are differing signs, there being more in Germany than in France, I feel that it is of cardinal importance that this country should enter the Community with an outstanding health relative to the maximum health it has experienced in the post-war period. It is moving slowly and painfully towards experiencing such growth. This country should not only logically be on the verge of a much faster rate of growth, but needs to be if the full benefits of our entry into Europe are to be achieved. Therefore, I should like the Government to spell out in a little more detail what they feel about our longer-term economic climate vis-à-vis our membership of the Community, though I realise that in the short term the approach of the Budget rules out any arguments on the narrower front.
I return to what my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) said about competition policy. I acknowledge his knowledge of the subject and depth of interest in it. I support what he says about the importance of the Community regulations. I hope that my hon. Friend the Minister of State, Treasury will say something on an important aspect of the matter. If the Government are now considering the competition policy, as has been suggested on a number of occasions, but more particularly Monopolies Commission policy, how is their consideration likely to relate to the Common Market directives and rules and regulations? Have they given a great deal of thought to the question? If so, is that perhaps the reason why the recasting of monopolies legislation and the proposals the Governments are apparently to produce in due course have been held up?
It is for the reasons I have given, and because I welcome the Bill in its present

form and content, that I was glad to have the opportunity to catch the eye of the Chair tonight.

9.15 p.m.

Mr. Ronald King Murray: The Bill is legally ingenious but constitutionally wanting, the ingenuity being Machiavellian if not Mephistophelian. I shall dwell on the constitutional aspects, but first I wish to express substantial agreement with the remarks of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) who made the cogent and forceful point about the need for greater guidance to be given to our courts as to how they are to reconcile the periphery and border of domestic and Common Market law.
I wish at the same time to adopt to some extent the sentiments expressed by my right hon. and learned Friend the Member for Liverpool, Edge Hill (Sir A. Irvine) who spoke with great feeling about the way in which the Bill will leech the common law of England away from this country. It would, of course, have the same effect on the law of Scotland, of which we are just as proud as English hon. Members are of their law. The law of Scotland stands in a somewhat better light in relation to this subject in view of the earlier common market which was created between Scotland and England and Wales.
I refer, of course, to 1707 and the Treaty of Union. For Scotland, and to a great extent for England, it was essentially the creation of a common market and common economic entity with political machinery to ensure its lasting future. In that treaty provision was made by Article XVIII to this end, and it is worth quoting:
That the laws concerning regulation of trade customs and such excises to which Scotland is by virtue of this treaty to be liable be the same in Scotland from and after the union as in England and that all other laws in use within the kingdom of Scotland do after the union and notwithstanding thereof remain in the same force as before (except such as are contrary to or inconsistent with this treaty) but alterable by the Parliament of Great Britain with this difference betwixt the laws concerning publick right policy and civil government and those which concern private right that the laws which concern publick right policy and civil government may be made the same throughout the whole United Kingdom but that no alteration he made in laws which concern private right except for evident utility of the subjects within Scotland.


There was a constitutional guarantee, however flimsy, that the people of Scotland were entitled to expect that nothing would be done, as for instance in this Bill, affecting the private rights and obligations of the people of Scotland except for their evident utility. It was equally made clear that if any change were made in the public law, such a change would be made openly and not by stealth and implication. That great constitutional article stands in marked contrast to this drab and uninteresting Bill.

Mr. Powell: Is it the hon. and learned Gentleman's opinion that the Bill is consistent with Article XVIII which he has cited, and is the alteration of the law of Scotland by Community regulation in line with the limitation on its alteration contained in that Article?

Mr. Murray: That is a problem on which I would not venture to give judgment. Indeed, it is a problem on which the courts may have to adjudicate in future. It is, however, doubtful whether one could reconcile this Bill with that important constitutional declaration.
The Bill is wanting in regard to aspects which have been mentioned by hon. Members on both sides and I do not want to repeat the criticisms which have been voiced. However, I wish to underline the criticism that has been put with great force about Clause 1(3) and Clause 2(1). These are the encroachments by stealth on the rights of the people of this country.
We should face the fact that what is being taken from us by stealth under these provisions are rights of vital political and constitutional importance which we at present enjoy. For example, under Clause 1(3) approval will be secured by Resolution of each House. In other words, it is by means of that formality that the Government can introduce some of the measures in the Treaty of Rome and the Treaty of Accession. This is a cursory and short procedure, an offhand way of extending the legal rules of this country. It does not compare in any way favourably with the normal procedure of legislation with which this House would normally handle such matters.
I cannot understand why the Bill should seek to derogate so far from the sovereignty of this Parliament that it is not to adopt its normal course of legislation by Act of Parliament in applying

the provisions of the Community. I have to accept, of course, for the purpose of this argument that if the Bill is passed it will necessarily follow that we will be bound to apply the regulations of the Community, but why should we not do it by the traditional method by Act of Parliament?
We are aware of the need to conform to the treaty if we accede, but surely the good sense of Parliament is not to be set aside and procedures that we have adopted and found useful through the centuries are not to be so lightly set aside. I cannot understand that this is a time when one would be looking for new and original procedures, but surely this Parliament of ours, of which we are so proud, has been sufficiently adaptable in the past to be prepared to change its procedures—not to derogate or run away from its procedures, but to adapt them and the legislative process to fit a new and challenging situation.
In concluding that line of argument, may I draw attention to a point already touched upon: the fact that this House will be virtually robbed of its power to ask questions on Common Market matters, whether oral or written, because so far as I can see there is no mechanism contemplated in the Bill, and no other mechanism outside the treaty or elsewhere, which would allow this Parliament to press for factual information and to feel that it had a right to get it. This may be the most important aspect of the points I have mentioned—the procedures we use to apply Community law to this country—because although it is true that if we enter the Community the end product of our debates will inevitably be that we will have to legislate to marry our laws to those of the Community, we should in that process direct ourselves to obtaining the maximum possible information about why a regulation is thought necessary, how it has been conceived and what it implies. I should have thought we should fight strenuously in this House for that right of procedure so that we retain the substance if not the form of our present parliamentary privileges.
Turning to a point I made at the outset, I find the Bill to be constitutionally wanting. It is not a great constitutional Statute—and that is an understatement. There have been great Statutes in our history. The Statute of Westminster was


such an Act of great constitutional importance. This Bill is one but nobody would call it a Statute comparable to the Statute of Westminster or great constitutional Statutes of the past. It fails. It has not lived up to the constitutional realities it implies; because there can be no doubt that its implications for the future are great. The portals of Brussels have been opened but instead of the British hon with a mane somewhat shorn entering, it is a constitutional mouse that has been sent to Brussels; and it is no good saying that the sovereignty which is being given up is not essential sovereignty. It is a significant part of the sovereignty of this country.
The hon. Member for Cheltenham (Mr. Dodds-Parker) sought to draw a parallel between our accession to N.A.T.O., the United Nations and so on, suggesting that some sovereignty was given up then. That is true but it was sovereignty in a peripheral sphere, the international periphery of our being which did not involve the heart of our domestic constitutional being as the Bill unquestionably does. We are surrendering a portion of the inner core of our sovereignty because we are dealing with two aspects of the constitution, first with an economic aspect and secondly with one which is more properly constitutional.
Certainly, we on this side of the House have always recognised that economic and political power are interdependent. We cannot have political freedom without economic power, and there can be no economic progress without political power. We separate these two at our peril. But Clause 2 makes it clear that this is precisely what the Bill does; it separates economic power from political power because the economic power is going to Brussels. Our destiny in economic terms will be based on Brussels; there can be no gainsaying that. But our political power to influence Europe is based here in Westminster. We are therefore separating economic and political power.
One can put it in a way that this side of the House can understand very well by saying that we as Socialists doubt whether social planning of a European economy is possible from Westminster. One doubts whether it is possible without something in the nature of a responsible

European Parliament. But that is something on the horizon, far away. Many people say that it is far away and seem to regard that fact as an advantage. Advantage or not, it is clear to us that economic planning is not possible without a strategic centre of political power on which it can be based. Parliament then ceases to have control over our economic destiny and the erosion of its political power will increasingly follow and become evident. That is the economic aspect.
I turn now to the constitutional aspect. This country has enjoyed a flexible constitution—our so called unwritten constitution—in which the ultimate safeguard for the rights of the people has not been in any text, in any written guarantee, but has rested on the sovereignty of this Parliament, not for the sake of us as Members in order to enhance our status and reputation, but to protect the people. The protection of the sovereignty of Parliament is the only constitutional protection we have, and under the Bill we are surrendering the core of that, our power to control our economic destinies. For these reasons I reject the Bill and all it stands for.

9.27 p.m.

The Minister of State, Treasury (Mr. Terence Higgins): In the long series of debates which the House has had on the Common Market, I am intervening for the first time at the conclusion of what one might describe as Act three, Scene one, because we had the two major debates in July and October extending over a number of days, we had a prelude to Act three in January, and we are now approaching the end of the first day of this three-day debate.
I am sure the House agrees that the debate has been as fascinating as it is important. It has covered a very wide range of subjects. I was a little unnerved by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), who said that the economists had had their beanfeast and that it was now time for the lawyers. Certainly, a number of extremely important legal points have been raised, and no doubt my hon. and learned Friend the Solicitor-General has taken due note of them. If he is fortunate enough to catch your eye, Mr. Deputy Speaker, he hopes to speak later in the debate.
Other matters have also been raised. For example, my hon. Friend the Member for Harrow, East (Mr. Dykes) spoke about monopolies legislation. This clearly comes within the area which my right hon. Friend the Secretary of State for Trade and Industry hopes to cover. The House has already spent a great deal of time debating this issue, and it is rather difficult to raise new points. As I see it, the task before us is somewhat on the lines outlined by my hon. Friend the Member for Harrow, East—to go into the matter in greater depth as a prelude to the Committee and Report stages of the Bill.
There are two particular parts of the Bill on which I would like to concentrate—first, Clause 2(3), which covers various financial arrangements required to meet our Community obligations, and, secondly, Clause 5, which concerns the question of customs duties. First of all, I want to say something about the financial provisions of the Bill, which are generally recognised to be of very great importance. These provisions are designed to cover both the transitional period and the longer-term arrangements.
During the debate the right hon. Member for Stepney (Mr. Shore) stated that these arrangements had been changed in 1970 and had not been taken into account when the last Administration made clear, in February, 1970, their intention to pursue the negotiations. I should point out that these long-term arrangements were also fully explained in the White Paper, "Britain and the European Communities", published in 1970 in paragraphs 41 to 43. Furthermore the arrangements were set out very clearly in the White Paper (Command 4715), which was published in July last year.
Perhaps I should refer to the relevant paragraphs, especially paragraphs 92 and 93 about the transitional arrangements and paragraph 95 concerning the longer-term arrangements. Paragraph 92 sets out clearly that:
The solution which has been reached is as follows. A percentage or 'key' has been set, broadly corresponding to our present share of the total gross national product (GNP) of the 10 countries likely to form the enlarged Community. This will represent the proportion of the budget which we should nominally be expected to pay in the first year of membership. This key will then increase marginally in each of the four subsequent years, under simi-

lar arrangements to those agreed by the Six for themselves.
Paragraph 93 says:
However, we shall pay only a proportion of our nominal contribution over these first five years. The proportion will increase in annual steps.
As to longer-term arrangements, paragraph 95 says:
In 1980 and subsequent years we shall be required to contribute 90 per cent. of our agricultural levy and customs duty receipts and such value added tax (VAT) (not exceeding the yield of a 1 per cent. VAT) as is necessary from each member country to close any gap between Community expenditure and Community revenues from levies and duties.
I should like to relate these passages in the White Paper to the financial provisions in Clause 2(3) of the Bill.
These financial provisions charge payments to meet our Community obligations directly on the Consolidated Fund, but with the possibility of placing some payments on the National Loans Fund. For example, candidates for charging on the National Loans Fund could be any loans to any other member States under the Community's mutual support scheme. The provisions in Clause 2(3) recognise and are appropriate to the nature of the Community's financing system. Taking the most important point, our commitment to provide our share of the central budget, the making available of the Community's own resources—the customs duties and levies in the first instance—virtually demands a direct charge on the Consolidated Fund. The decision to join the Community involves a firm commitment from the outset to discharge our various obligations to the Community and the member States. Such commitments can be fully expressed only by a direct charge on the Consolidated Fund, and this is what the Bill provides.

Sir Robin Turton: Will my hon. Friend make this clear? Will they be voted in Supply or Consolidated Fund standing services? If they are under the latter, of course they will not be debatable in the House of Commons on the Consolidated Fund Appropriation Bill.

Mr. Higgins: I will make it clear. There will be a direct charge on the Consolidated Fund, and this is what the Bill provides. The revenue is earmarked, so to speak, for the Communities from the moment it accrues. It would not be


consistent with the nature of the Communities' system to interpose a vote procedure. If I may, I will come to the question of votes. I ask my right hon. Friend to wait until I have finished this passage.

Mr. J. T. Price: Before the hon. Gentleman leaves that point—

Mr. Higgins: I am not leaving this point but continuing. I should like to come to the question of Votes in a moment. I hope that my right hon. Friend will listen to what I have to say because we are all agreed that this is a matter of very great importance.
Essentially what are called the Community's "own resources" comprise customs duties, agricultural levies and, in principle, from 1st January, 1975, a proportion of V.A.T. up to a 1 per cent. rate. Until 31st December, 1974, the proportion of customs duties which member States have to hand over will gradually increase. From 1st January, 1975, onwards all customs duties and levies will be paid to the Community's budget. There will be a 10 per cent. rebate for costs of collection. Till the own resources system is completed by the payment of part of the V.A.T. revenue, any deficiency in the budget will be met by contributions from member States according to an agreed scale.

Mr. W. Baxter: Would the hon. Gentleman put that into £.s.d. and give us some indication of what it is going to cost in a pounds, shillings and pence?

Mr. Higgins: It depends on the size and shape of the budget. The hon. Member will, of course, be familiar with the package in the White Paper, going on from the part which I have just quoted. I will come in a moment to the point which he has raised. What I should like first of all to do is to complete the point I was dealing with a moment or two ago.
There is no different degree of obligation to make the other element of our contribution to the budget—that is to say, the member State contribution which I have just referred to—which will continue till it is replaced by part of the proceed of V.A.T.—by a percentage of V.A.T. A direct charge on the Con-

solidated Fund is, therefore, appropriate as far as that is concerned.
I should now explain to the House—and this is related to the point which my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton) was asking a moment or two ago—what is covered by Clause 2(3)(a) and (b). Paragraph (a) provides for all other expenses incurred, other than the Community obligations to which I have just referred, to be paid out of Votes. This follows the normal procedures for Government expenditure.
Expenses under this head would comprise a number of categories, and I should like to give some examples, if I may. There would be payments involved in carrying out in the United Kingdom the price support system under the common agricultural policy. This expenditure would be matched by payments into the Consolidated Fund by the Communities Another example would be pay and pensions to members of the Intervention Board for Agricultural Produce and payments to the Sugar Board under Clause 7(2).
To take another example, there are the administrative and incidental expenses incurred by Departments in carrying out various requirements of the Bill and the treaties—for example, the administrative expenses of the Intervention Board for Agricultural Produce set up by Clause 6 of the Bill. Another example is payments by the Government in connection with any order made under Clause 2(2) of the Bill—for example, payments made by the Department of Trade and Industry providing for schemes which would enable us to take advantage of the right to E.C.S.C. grants.
Clause 2(3)(b) provides for the treatment of receipts. These would all be paid into the Consolidated Fund or into the National Loans Fund if they arose out of payments directed to be made from the National Loans Fund in the first place.
The main receipts from the Communities would be those from the budget. These would consist largely of the agricultural payments to the United Kingdom to which I referred just now. There would also be some receipts from the European Social Fund. Other possible receipts would be European Coal and Steel Community payments.
There are two other financial aspects of the Community's activity to which I should draw attention. The first concerns the European Investment Bank. As a member of the Communities we shall become a member of this. The changes to the bank's statute which enlargement makes necessary are set out in Protocol 1 of the Treaty of Accession, Cmnd. 4862, pages 77 to 81; and our obligations to the bank are covered in Clause 2(3) of the Bill.
The bank's purposes are set out in the original E.E.C. Treaty. Those purposes were to further regional development, industrial modernisation or conversion, projects of common interest to several member States. Its practice is to raise on the capital markets of the Community the money needed for its loan operations.
The bank has had a very impressive record. It has made a notable contribution to the Community, particularly to the development of the regions and to industrial conversion. Last year its loans and guarantees totalled more than £200 million spread over 52 operations.
The management committee of the bank has visited London and had talks with the Chancellor. I had the pleasure of having discussions with it, and I believe the talks were encouraging. There is every reason to suppose, remembering that its objectives include regional development, that the bank will have a useful rôle in the United Kingdom.
Secondly, I should briefly mention the E.E.C. Mutual Support Scheme—

Mr. Shore: The hon. Gentleman made it clear that the payments to the European Investment Bank would come out of the Consolidated Fund provisions of Clause 2(3). Would he not agree that it is rather an anomalous situation that long-term money of this kind should be paid out of the same fund which makes the annual payments to the Community? Does he not think that they ought to be differently dealt with under separate provisions?

Mr. Higgins: The right hon. Gentleman has somewhat misunderstood the position on the European Investment Bank. Its practice is to raise on the capital markets of the Community money which it needs for its loan operations. It

is possible that provision could be made for public funds, in which case the more appropriate source would obviously be the National Loans Fund, not the Consolidated Fund because that would run into the kind of problems to which the right hon. Gentleman referred. The normal practice of the bank is to raise money independently, and it will not necessarily be involved in the kind of operation which the right hon. Gentleman appears to envisage.
I was saying a word about the E.E.C. Mutual Support Scheme, to which reference was made in the Explanatory and Financial Memorandum. The E.E.C. Treaty provides for mutual support between member States in the event of a member encountering balance of payments difficulties, and a detailed scheme for medium-term support has been drawn up should the need arise. The United Kingdom has accepted a maximum lending obligation under this scheme of £250 million; that is 600 million units of account or just over 21 per cent. of the total. As I mentioned, it is envisaged that any loans under this scheme would be charged on the National Loans Fund.
Our participation in this scheme seems to me entirely natural. It is hardly a new departure for us to be associated in a scheme of this kind since its purpose—within the Community—is very similar to the purpose of I.M.F. facilities on a wider basis. I should just add that participation in a particular support operation should the need arise is not obligatory. A member country can decline to take part, or can ask for refinancing or early repayment of a loan if it has balance of payments difficulties itself.

Mr. Powell: Has my hon. Friend yet reached the point at which he can confirm in reply to my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton) that, apart from the payments in paragraph (a), the rest of the payments from this country to the Community will not be by way of Votes and consequently the parliamentary principle of grievance before supply will not apply?

Mr. Higgins: I hope I have made it clear that there are two separate aspects. The first is the obligations we owe to the Communities and the second is the various items which will be covered by the Votes for to which I have referred.

Mr. Marten: My hon. Friend has rather galloped through his brief and it was difficult to interrupt at the right point. I would like to make a point about V.A.T. He got the phraseology slightly wrong. I think he said, "1 per cent. of V.A.T." It is not that; it is V.A.T. up to 1 per cent., which is very important because there is a huge difference in how it is calculated. Secondly, as this is British taxpayers' money, can he say what arrangements are being made to establish an Expenditure Committee of this House to follow through the expenditure in the Community? Is he aware that Professor Dahrendorf said that there is no check and it is very wasteful?

Mr. Higgins: I am grateful to my hon. Friend for his intervention. If he reads HANSARD, he will find that I said "up to 1 per cent. of V.A.T."

Mr. Marten: V.A.T. up to 1 per cent.

Mr. Higgins: I would not wish there to be confusion on this point. As is well known, we are proposing to introduce in the Finance Bill a value-added tax. Decisions on the rate and coverage of that tax are not matters which I am able to discuss now because my right hon. Friend will deal with them in his Budget speech. I think it is quite clear from the Bill and from the White Paper what will be the position concerning the contribution to the Community's budget. I am sure my hon. Friend will find when he reads HANSARD tomorrow that there is no doubt about that.
On the particular point which he raised, and which I think was implicit in the intervention from below the Gangway on the Opposition side, about the actual size of the Community budget, this is also a matter of great importance. The size of the budget is determined by the Community's estimated expenditure for the year in question and not by the total amount of "own resources" available. As a member of the Community we shall have our full share in all Community decisions on the level and pattern of Community expenditure, but during the transitional period our contribution to the budget will be subject to maximum limits as set out in the White Paper.
Perhaps this can be most clearly seen in the table on page 24, which shows our

starting liability at 8·6 per cent. rising over five years to a figure approaching 19 per cent. Further limits will apply to our share of the budget in 1978 and 1979, as explained on page 5 of the Explanatory and Financial Memorandum. From 1980 onwards, we shall of course apply the system in full. From accession we shall be able to influence the size and composition of the budget and, as my right hon. and learned Friend the Chancellor of the Duchy of Lancaster reminded the House in introducing the Bill, the process of formulating Community policies is a gradual one involving full consultation with member Governments.

Mr. Jay: As the hon. Gentleman has obviously considered these matters carefully, will he tell the House what it wants to know and has the right to know? What is his estimate of the net out-payment in budgetary terms from this country from 1980 onwards after the transitional period has ended?

Mr. Higgins: The right hon. Gentleman and the right hon. Member for Stepney have continued to pursue the question of the ultimate size of the Community budget after the end of the transitional period. The right hon. Member for Stepney continues to play this numbers game with undiminished zest. Quite apart from all the familiar hazards of economic prediction, which were well illustrated—if I may take up the point made by the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) on economic planning—by the fate of the National Plan, it is clear that our entry into the Community will have a profound effect on our pattern of international trade which makes nonsense of quasi-scientific predictions of the likely size and share of the contribution to the central budget in the 1980s.
It is also right to stress the point made by the hon. Member for East Ham. South (Mr. Oram) that we need to take account of the likely shift from the present predominance of agriculture in the budget. One factor here will be the further shrinking of the Community's agricultural population.
During the 1960s, 5 million Community farmers left the land. Even if the rate of outflow in the 1970s is not rapid—and I do not underestimate the


social and environmental problems involved—this process will continue, and regional and industrial developments will play an increasingly important part in Community policies and will no doubt take their share of Community expenditure.

Mr. Jay: If the hon. Gentleman has no idea quantitatively what the economic consequences will be, how is he so certain that it will be of advantage to this country?

Mr. Higgins: The two points are quite separate, as the right hon. Gentleman will surely recognise. On the one hand there is the actual contribution to the budget; the other question involves the benefit which we would derive. Clearly one needs to balance the one against the other. The right hon. Gentleman is all the time concentrating on costs and not on potential benefits.

Mr. Shore: I am sure that the hon. Gentleman wants to be fair to my right hon. Friend the Member for Battersea, North (Mr. Jay) and myself. He says it is impossible at this stage to quantify the benefits which might accrue. We do not know this. My right hon. Friend and I are in serious dispute with the hon. Gentleman and his right hon. and learned Friend on whether they have made their calculations of our contribution beyond the year 1977. We think that the result of the calculation is not a decrease in the amount we are to pay but virtually a doubling between 1977 and 1980. Why is it that the Irish Government have been able to do this calculation for 1980? Other Governments are able to do this and it is not due to any peculiar genius on their part. If other Governments can estimate up to that date, why are Her Majesty's Government unable to do so?

Mr. Higgins: This is ground which the House has covered many times. When one remembers that the right hon. Gentleman's Government, and particularly the Department with which he was associated, were so incredibly wrong within a matter of days, let alone weeks, in their economic forecasts five years ahead, it is extraordinary the faith he still has in economic predictions. He and I know something about the difficult technical matters which are involved, and it is not likely

to be fruitful to continue to pursue this line of thought.

Mr. Leslie Spriggs: Why does not the hon. Gentleman answer the question?

Mr. Higgins: I have many further points to make and I want to get on with them.
I turn to Clause 5 which is concerned with customs duties. Essentially what is planned is the elimination, step by step, of the tariffs between the Six and the new member States, tariffs between the Six having been eliminated in July, 1968; and secondly the gradual establishment of the common customs tariff around the enlarged Community.
The timing of these two processes is not the same. Whereas the elimination of the tariffs between the United Kingdom and the Six will be done in five equal stages starting three months after accession, it is intended that our move towards the common customs tariff should be carried out in four stages starting a year after accession.
The Treaty of Accession provides that we must progressively reduce and eventually abolish our existing customs duties on imports from the rest of the Community and align our duties on imports from other countries to those of the Community's common customs tariff. The first cut of 20 per cent. in the duties between us and our Community partners is due on 1st April, 1973. The next cut of 20 per cent. for both is due on 1st January, 1974, on which date the first move of 40 per cent. towards the common customs tariff is also to be made. The final instalments—complete abolition of protection within the E.E.C. and complete adoption of the C.C.T. against other countries—are due on 1st July, 1977. These moves towards abolition of inter-Community duties and adoption of the common customs tariff will be made by an order under United Kingdom legislation, the Import Duties Act 1958.
Therefore, since the duties to be charged will stem from the treaties, that Act needs to be amended varying the purposes for which orders imposing duties may be made and what they prescribe. Section 5(5) of the Bill therefore amends the Import Duties Act, 1958, so as to allow duties to be imposed with a view to


securing compliance with Community obligations. Repeals of those parts of that Act which will become redundant are made in Part I of Schedule 3 to the Bill, and further amendments to the Import Duties Act are made in Part A(i) of Schedule 4 to the Bill.
After the traditional period—that is to say, by 1978 at the latest—the rates of duty applicable to most imports into the United Kingdom will be fixed by E.E.C. regulations giving the common tariff direct legal effect throughout the Community. The regulations will, of course, apply directly in the United Kingdom by virtue of Clause 2(1). The first part of Clause 5(1) puts beyond any doubt the liability to pay these duties, which must be clear and unambiguous. The second part of the subsection nevertheless maintains a Treasury power, subject to the recommendation of the Secretary of State, to impose duties on goods outside the common tariff and not subject to duties fixed by any directly-applicable Community instrument. For example, the tariff of the Coal and Steel Community is established by decisions of the member States, which though binding on members, have to be given effect by legislative action under member States' national powers.
So far, I have been talking mainly about the new common tariff and our movement towards it. The main components of these will, of course, be derived from the existing common tariff and the existing import duties of the United Kingdom and other new members. But there is one detailed point which I should make clear in the short time remaining to me.
The treaty provides for special treatment for customs duties of a fiscal nature. In the United Kingdom these are the customs revenue duties on hydrocarbon oil, tobacco, spirits, and so on. With the exception of that on hydrocarbon oil, each of these duties contains a protective element; that is, the relatively small amount by which the rate of customs duty exceeds the corresponding rate of excise duty.
The special treatment contemplated by the treaty is that the fiscal elements of these duties may be replaced by "internal taxes", chargeable equally on imports and domestic goods alike, in which event only

the remaining protective element, chargeable solely on imports, would be subject to the provisions for phased abolition and alignment as for tariffs generally. This is a point which has not been generally appreciated, and it seems right and proper to spell it out.
There are a number of other points with regard to customs procedures which are of considerable importance but which probably may be dealt with more appropriately in Committee. Essentially what I have sought to do is to outline to the House the main financial provisions and also to comment briefly on the actual provisions of the Bill concerning customs duties.
The second aspect concerning customs duties is not only the creation of the common customs tariff but also the progressive and eventual complete elmination of the duties between the various members of the enlarged Community. I have no doubt that it is in this area we shall derive very great advantages.
I want, finally, to take up a point made by my hon. Friend the Member for Harrow, East. He suggested that it was very important in joining the Community that we could create the right overall economic climate. I believe that the measures which we have taken in terms of tax reform, the reform of personal and corporation tax, and the reform of our indirect tax system and our general fiscal policy, are such that we can look forward to joining the Community with confidence.
Moreover, we have over the last 18 months reduced taxation by more than £1,400 million in a full year, and, as my hon. Friend the Prime Minister made clear a few days ago, we are now entering upon a period of sustainable economic growth where industry may reasonably expect to see our domestic markets growing at a rate of some 4 or 5 per cent. Provided that price competiveness in international markets is maintained. this should provide a firm basis for our industry in domestic markets and. I believe, a springboard from which we can enter the Community and increase our overall economic prosperity.

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hawkins.]

Orders of the Day — ROOFSEAL LIMITED, DONCASTER

10.0 p.m.

Mr. Harold Walker: It is usual for a Member who has the good fortune to secure an Adjournment debate to express gratitude for the opportunity thus presented to him. Tonight, however, I can only express regret at the necessity to take up the time of the House to try to secure redress of a deep and serious grievance of one of my constituents. It is a necessity which arises because of the refusal of the Under-Secretary of State for Trade and Industry to discuss with me, in the privacy of his office, the matters which I now want to lay before the House, concerning which I have been in regular correspondence with the Under-Secretary, his colleagues and, indeed, Ministers of the previous Administration over a considerable time.
Roofseal Limited of Doncaster is a small company which was created 11 or 12 years ago—

Sir Harmar Nicholls: On a point of order, Mr. Deputy Speaker. I apologise to the hon. Gentleman but, in the interests of the House and its conventions, is it usual for an Adjournment debate to be initiated from the Dispatch Box, which gives it an authority which an Adjournment debate ought not to have? I make this point in the friendliest way. I have known Ministers move to the back benches, as a former Member for Luton did on one occasion, to show that it was not an official matter. It may be unkind of me to say this, but in the interests of the House it is a point which I think should be on record.

Mr. Deputy Speaker (Sir Robert Grant-Ferris): This is a convention of which the Chair is really not particularly cognisant. As far as the Chair is concerned, the Dispatch Box does not exist.

Mr. Walker: I am rather pleased that the hon. Member for Peterborough (Sir

Harmar Nicholls) has raised this matter. It is not the first time, and I hope it will not be the last, that I have had the good fortune to secure an Adjournment debate and address the House from the Dispatch Box. The hon. Gentleman knows as well as I that no seats in the House are privileged and preserved for individual Members. If I seek the advantage of the Dispatch Box, it is only to establish a degree of parity between the Minister and myself.
Whatever the convention—and conventions are not perpetual and binding—I was saying that Roofseal Limited is a small company which was created 11 or 12 years ago by my constituent Mr. Ronald Clark, who is the major shareholder. The basis of the undertaking was to weatherproof roofs. By his skill, toil and business acumen, Mr. Clark built the company into a very successful and profitable organisation.
During the mid-1960s the company was diversifying into property development and dealings. The financial arrangements of the company were always with Lloyds Bank Ltd. and at some stage debentures were created in favour of that bank and Royal Exchange Assurance to secure a total sum of £22,000.
During the spring of 1968 certain events occurred which sowed the seeds of Mr. Clark's subsequent misfortunes. The first of these arose from major roadworks which were being carried out during the widening of Balby Road, Doncaster, in my constituency, where the company's offices were situated. Those works, which were being carried out by Doncaster Corporation on behalf of the Ministry of Transport, led to my constituent eventually being in dispute with the corporation about damage to the foundations of his offices which had been exposed by excavatory work. Whether wisely or not I will not judge, but Mr. Clark withheld payment of rates on his premises pending settlement of his claim. At about the same time my constituent found himself involved in court proceedings which arose from the disordered state of his matrimonial life.
It was apparently because of those events that, in about May, 1968, Lloyds Bank restricted the company's overdraft facilities. In November of the same year, with no warning whatever according to


my constituent, the bank appointed a receiver of the company, a Mr. Hellyer of Leeds, who took over control of the affairs of the company on the same day that Mr. Clark was informed by letter of his appointment.
I understand that at that time the capital assets of the company were valued in excess of £100,000 and there was no question of insolvency. Furthermore the company was making a substantial profit—£20,000 in the preceding 20 months of trading.
It was from that moment, according to my constituent, that the destruction commenced of the viable and flourishing undertaking he had so painstakingly built up. According to him, the receiver proceeded to sell off the assets, which had previously been valued, at sums very much less than their market price in order to pay off the debenture holders. It is the main complaint of my constituent that those sales occurred as private transactions. There is no evidence whatever that property sold to meet the debentures was sold by public auction or publicly. This contention is supported by Mr. Clark's solicitor.
Among the assets sold in that way were the company's offices and an adjoining petrol filling station at Balby, Doncaster. I understand that these together were sold for £25,000, but the offices alone had been valued three or four years earlier at £30,000 and the petrol filling station had been valued at £60,000. The sale of this property was never publicly advertised, nor was there any public auction, according to my constituent's solicitors.
I should say that while this was going on my constituent was serving a prison sentence consequent upon the court proceedings to which I have referred—not for any offence connected with the company but on a charge arising out of his matrimonial affairs. It was at his request that I visited my constituent during that period at Armley Prison, Leeds. I well recall his anguish in his belief that his business was being pillaged while he was powerless to take action.
Of course this is not something on which I would expect the Minister to comment tonight, but I had occasion at

the time to complain to the Home Office about the almost complete denial to my constituent of facilities to enable him to safeguard his business interests while he was in prison.
Because the obstacles presented by his personal circumstances prevented him from adequately defending his business interests, it was about this time that I sought to discuss my constituent's affairs directly with the private receiver, Mr. Hellyer. All I got was a brush-off. I was as good as told to mind my own business, although I was speaking on behalf and with the full authority of my constituent.
In reply to my letter of 23rd November last year the Under-Secretary of State—I believe it was the colleague of the Minister who is attending tonight—reminded me that Mr. Hellyer was acting on behalf of the debenture holder. He said:
He is primarily concerned with the interests of the debenture holder.
The debenture was discharged with full payment on 21st September, 1969, well over three years ago. In spite of that, the receiver is still in charge of the company and is still selling its assets.
Another petrol filling station belonging to the company was put up for sale towards the end of last year. This time the property was proposed to be sold by public auction and was thus advertised, but not before Mr. Clark had learned that the receiver had let it be known that offers of £5,000 or £6,000 were acceptable. Yet Mr. Clark had previously been offered in writing—the written offer is lodged with his solicitor—£12,000 for this property from an international oil company. The property was withdrawn on the day of the sale.
In his letter of 10th December last year, the Under-Secretary said that the receiver, Mr. Hellyer, was not subject to the control of the Department of Trade and Industry. I have a growing conviction that he is not subject to any kind of control whatsoever. Indeed, he appears to possess unbridled power. It may well be that when the Under-Secretary replies he will say that my constituent can seek redress in the courts for any grievance he may have when the receiver finally withdraws from his handling of the company's affairs. On


present form, however, it looks hardly likely that there will be sufficient money left in the kitty to pay even the bus fare to the solicitor's office.
That brings me to another immediate problem. I understand that the major impediment now to Mr. Hellyer, the receiver, concluding his activities is the failure of Mr. Clark to submit the necessary statement of affairs. The Under-Secretary knows that it is on this point that I have been in correspondence with him recently. As he knows, Mr. Clark has refused to sign the statement that has been drawn up because he says it is at fault in several important respects. In effect, the Under-Secretary says in his letter, "What is Mr. Clark complaining of on that score?" He suggests that the statement is prepared by Mr. Clark's accountant and that in any case, if he disagrees with it, it is up to him to make such alterations as he thinks necessary to put it right.
I understand, first, that the statement was prepared not by an accountant appointed by Mr. Clark but by one appointed to act on his behalf during the period when he was in prison. What is more important than that, however, is Mr. Clark cannot submit a corrected statement without access to the necessary documents, and he says that these documents are distributed among different hands. Some were lodged with a Doncaster solicitor who formerly acted on his behalf and who now says that they have been lost. Some are lodged with a Leeds solicitor who acted on Mr. Clark's behalf when he was in prison and who now refuses to surrender them, apparently, because he has not been paid for his services. But the essential documents are apparently with the receiver himself and he ignores any request for information. He ignores requests by Mr. Clark, by Mr. Clark's accountant and by Mr. Clark's solicitors. Nor will the receiver's solicitors respond to any requests for help from Mr. Clark's solicitors. Indeed, I have a letter from Messrs. Saffman and Co., Solicitors acting on behalf of Mr. Hellyer, the private receiver, addressed to my constituent's solicitors, which states:
We are advising the Receiver to refuse to have further communication and not to reply to any further request or query from Clark.

Although the Under-Secretary says that he has no control over the receiver—and that seems fairly obvious—it is none the less the Department of Trade and Industry which has issued a threat to my constituent that he is liable to a fine of £10 per day until he signs the statement of affairs. No one is more anxious than Mr. Clark to see the statement of affairs completed and filed. He is desperately anxious to try to put back together the fragments of his business left behind after the shattering impact of the receiver, but he cannot understand why not only is every impediment placed in the way of his doing so properly and honestly, but he is being bludgeoned by the Department to acquiesce in something that is false. Nor can he understand why the Department, which disclaims any responsibility for the actions of the receiver, should none the less provide the sanction on which the receiver relies.
I give one example of the kind of fault that my constituent picks on in the statement as it stands. Although it shows the company's former secretary as a creditor in the sum of £3,000, nowhere is there shown the company's counterclaim, made before the company went into receivership, for a sum of £9,000. It is not good enough merely to suggest that Mr. Clark make a corrective entry. Clearly he must have the necessary documentation to support that entry.
I have by no means exhausted Mr. Clark's catalogue of complaints and, indeed, serious charges against the conduct of the receiver. They are many and they are interwoven into a situation far too complex and tangled for me lucidly and adequately to present in the course of an Adjournment debate, and I would not pretend to have the expertise that is needed to do so.
It is a situation with which I have been dealing, seeking to assist my constituent, for more than three years. Because my remarks must inevitably reflect unfavourably upon the professional conduct of the receiver, I have been most reluctant over that period to bring these matters before the House and hence into the public view. But I have been left with no alternative if I am not to fail in my duty as a Member towards my constituent. The receiver's refusal to supply information to Mr. Clark or his solicitor or to answer their queries; the refusal


of the receiver's solicitors, Messrs. Saffman and Company, to be other than obstructive; the refusal of Mr. Hellyer to discuss Mr. Clark's affairs with me, and the Minister's refusal to accept any responsibility or even to discuss with me the imposition by his Department of a fine, which contradicts completely the long-standing, traditional relationship between Members and Ministers—all of these matters leave Parliament as the only immediate means by which my constituent may be set on the road towards redress and justice.
The behaviour of companies and those who handle their affairs is regulated in the main by the framework of law provided by the Companies Acts. I also understand it to be the task of the Department of Trade and Industry as well as of the courts to secure observance of those Acts. Where there are allegations of misbehaviour in the handling of a company's affairs, the Minister can instruct an inspector acting on his behalf to make such inquiries as he deems to be necessary.
The Minister has the power and responsibility to do that, and that is the action I ask of him tonight. I am asking him not to do that which he has done previously in our correspondence, which is to ask Mr. Hellyer or his representatives whether Mr. Clark's allegations are true and then present the reply as the Minister's answer. That is not the Minister's rôle. It is his job not to align himself with one of the parties, as he has done, but to stand in the middle and ascertain the truth. That is what my constituent asks. I do not ask the Minister to accept unquestioningly and uncritically what I have put to him, nor does Mr. Clark, although in the three years I have been aware of his difficulties I have never found reason to doubt the truth of what he has told me.
What my constituent asks is that an inspector be appointed to put his allegations to the test. That in itself says much for Mr. Clark's sincerity. Unless and until this or similar action is taken, nothing will shake Mr. Clark's conviction that he has been the victim of ruthless and high-handed action by the private receiver, pursued mainly at a time when Mr. Clark was unable to defend himself or his company's affairs. What seems

beyond doubt is that the intrusion of the private receiver into the affairs of Roofseal Limited, Doncaster, marks the moment in time when a flourishing and prosperous business rapidly degenerated first into moribund inactivity and now into virtual ruin. It was a business which, furthermore, offered employment to a small but, in an area where male unemployment is running at over 9 per cent., significant number of people. Over the same period, and he believes for the same reason, my constituent has seen his assets disappear and his former wealth melt away until now he is reduced to near-penury.
It is not for me to judge the truth of all the allegations made, nor can the Minister do so tonight. But they are so serious that if they are only fractionally true they reveal a state of affairs requiring thorough investigation. The first step ought to be to appoint an inspector, as the Minister is empowered to do by the Companies Act, to look at the receiver's handling of the affairs of the company.

10.20 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): I would not for one moment question the right of the hon. Member for Doncaster (Mr. Harold Walker) to raise the grievances of his constituents nor the importance of the matters which he has brought before the House tonight. I would, however, remind him at the outset of the constitutional position. Though I and others of my colleagues in the Department of Trade and Industry try, and have tried, to assist hon. Members with information about receiverships, it is not the responsibility of the Government to control, police or arbitrate in disputes of the sort which the hon. Gentleman has raised.
I have always been careful in letters which I have sent on matters concerning receiverships to make it clear that I am merely trying to help hon. Members by presenting the facts to them. I point out that I am not trying to decide who is right or to take one side or the other or in any way lend the authority of Government to one of the parties in a dispute about a receivership. This is because it would be entirely wrong for the Government to attempt to do that. Receiverships of this sort arise out of contracts between debenture holders and


those to whom they lend money, and the interpretation of those contracts is entirely a matter for the civil law save in so far as there are a few areas where company law impinges on the situation.
I wish to make it clear at the outset that most of the matters which the hon. Gentleman has raised are not matters in which the Government have or should have responsibility but are matters of dispute which can be sorted out at civil law between the two parties, the receiver and the hon. Gentleman's constituent.
I wish to correct one point of fact. The hon. Gentleman said that the debenture had been discharged. So it has, but the preferential creditors have not been paid off and part of the terms of the debenture is that the preferential creditors' claims should be met. In addition, I believe that there is a judgment debt owing to the company by Mr. Clark. Until those obligations have been discharged the receiver is not clear of his responsibilities in the matter.
There are no provisions whatever in the Companies Acts for the Department of Trade and Industry and Ministers therein to supervise the activities of receivers. There are, however, certain areas where we could intervene, and it is right that I should make it clear what those areas are.
It is the duty under the law of the Registrar of Companies to see that directors supply the receiver with a statement of affairs. This duty arises under Section 372 of the Companies Act, 1948. The hon. Gentleman mentioned this and talked at some length about the difficulty that his constituent had had in completing and signing his statement of affairs. I do not know what his difficulties were. Nor is it my task to help him or interpret his duties under the law. I am merely responsible under Statute for making sure that where a statement of affairs has not been given to the receiver, the due penalties are exacted. It is for the hon. Gentleman's constituent to make sure that he is not in breach of this part of the Companies Acts. No amount of excuses or pleading is acceptable to me because I have merely to see that this part of the law is enforced. I therefore urge him to comply with the law in this respect.
Next, it is part of my duties to see that the receiver files a statement of affairs,

when he has received it, together with his comments thereon, with the Registrar of Companies. That has not been done, but it is not the receiver's fault because he has not received the statement of affairs from the hon. Gentleman's constituent. It is my duty to see that the receiver files with the registrar his receipts and payments under Sections 372 and 374. So far as the Companies Acts go, it is the sole duty of the Department of Trade and Industry to discharge these functions.
It is possible, as the hon. Gentleman suggested, that there could be an investigation under Section 109 of the Companies Act, 1967, into the conduct of the receiver. A receiver in a case like this is acting in order to promote the company for the purpose of receiving moneys which the debenture holder is owed, and he has a duty to run the company in the interim. If in his capacity of managing the company he were to contravene any of the provisions of the Companies Acts, or if we had a suspicion that he was not conducting the affairs of the company properly, we would have power under Section 109 to make an investigation and under Section 165 of the 1948 Act to take further action. I want to make it abundantly clear, however, that it is not right, nor is it our intention, to investigate under Section 109 every case in which there is a conflict of opinion between receivers and those who are subject to these proceedings.
It would only be on suspicion on grounds of criminal action, or of a compound between a receiver and a potential purchaser of assets, or of some form of fraud, that the Department would feel it right to investigate the conduct of a receiver. There are no such grounds in the case the hon. Gentleman has raised. Therefore, I want to reiterate that it is wrong, and it is not our intention, to arbitrate between receivers and directors of companies on the question of who is responsible or who is right or who is wrong in any case such as this where there is dispute.
There are some guidelines which might help the hon. Gentleman. There have been judgments whereby receivers have been exonerated for not obtaining the higher price. I refer to the dicta of Lord Justice Jenkins in the case of B. Johnson & Co. (Builders) Ltd. (1955). In


this case the debenture holders claimed that the receiver had not obtained the higher price he might have been able to obtain and the receiver was found to have discharged his duty although he had not obtained the higher price. In another case, however, that of Cuckmere Brick Co. Ltd. v. Mutual Finance Ltd., the court upheld an appeal where a mortgagee was thought to have owed a duty to the mortgagor to take reasonable care to obtain a proper price for the mortgaged property. In fact, he did not declare the fact that the property had planning permission, which would have increased its value.
I say again that if the hon. Gentleman's constituent feels that he has a case at civil law against the receiver, he has every opportunity so to pursue it. He could take an action for misfeasance, not because the receiver has exercised a lack of judgment but because there has been either a breach of the contract or negligence or recklessness on the part of the receiver. To interpret in this case whether there has been such a breach is clearly far beyond my responsibility and is a matter entirely for the courts.
I suggest, therefore, that if the hon. Gentleman's constituent feels he has been wrongly treated in this instance, his proper redress is to the courts. I emphasise that it is not the responsibility of Ministers to interpret the law of contract as between the debenture holder and someone who has suffered as the hon. Gentleman's constituent has done in this case. The hon. Gentleman seems to claim, both in his letters and in what he has said tonight, that in some way this is a matter for the Government. I think I have made it clear that it is not so and that it is wrong to evade one's remedy at law by coming to this House and trying to make the Government intervene in a situation which arose out of a private contract between one who lends and one who borrows.
I express, of course, all sympathy with the hon. Gentleman's constituent, but I think it is wrong that this matter should be treated as a political matter when it is a purely legal matter between the receiver and the hon. Gentleman's constituent.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.